EFFECTIVE 
INDUSTRIAL  REFORM 


DAVID  C.  REID 


^ 


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UNIVERSITY  OF 
CALIFORNIA 

SAN  01  EGO 


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Effective 
Industrial  Reform^ 


—  by  — 

DAVID   C.   REID 

Pastor  of  the  Congregational    Church 
Stockbridge,   Mass. 


FIRST  THOUSAND 


Press  of  the  Eagle  Printing  and  Binding   Company 
Pittsfield,    Massachusetts 


COPYRIGHT 


CONTENTS 

Introductory  Statement 
PART  I.     THE  PRESENT  CRISIS 

Chapter  I.  Justice  Dethroned 1 

II.  The     New    Despotism  —  Its 

Rise 12 

III.  The    New    Despotism  — Its 

Might 18 

IV.  The    New  Despotism  —  Its 

Evil    Fruit 43 

PART  II.     METHOD  OF  EFFECTIVE  REFORM. 

Chapter  V.  Our  General  Plan  of  Reform...  77 

VI.  Fundamental       Features  — 

First  Group 89 

VII.  Fundamental  Features — Sec- 

ond Group 109 

VIII.  Rules      Governing     Invest- 

ments    113 

"        IX.       Fundamental      Features  — 

Third  Group 128 

PART  III.     RESULTS  FROM  THE  ADOPTION  OF 
THIS  PLAN 

Chapter  X.         The  People  Supreme  and  Jus- 
tice Enthroned 141 

XI.  Efficiency  Attained  and 
The  Universal  Welfare 
Promoted 152 


PART  IV.     CONCLUDING  TOPICS 

Chapter  XII.     The  True  Socialistic    Program.  168 
XIII.  The    Labor   Union    and    In- 
dustrial Reform 203 

"        XIV.    The   American   Farmer  and 

Industrial  Reform 203 

XV.       Questions    and    Answers — 
Method  of  Promoting  the 

Reform 213 

"         XVI.    Responsibility  of  the  Church 

for  Industrial  Reform 245 

XVII.  A  Final  Word  of  Encourage- 
ment and  Warning 265 


APPENDIXES 

Appendix  I.  The  Forces  Promoting  Immigration. 

275 

II.  The  Wages  of  Immigrant  Labor.     277 

III.  Distribution     of     Wealth     under     our 

Plan 279 

IV.  Method  of  Recording  Investors  in  the 

order   or   their  Turn   by   the   Card- 
catalogue  System 281 

INDEX. 


INTRODUCTORY  STATEMENT 

The  object  of  this  book  is  not  to  stir  up  hatred  and 
strife  between  the  rich  and  the  poor,  nor  to  incite  work- 
ingmen  to  revolt  against  those  who  employ  them,  nor 
to  condemn  the  men  who  have  attained  to  wealth,  le- 
gitimately, by  the  present  system — a  system  for  which 
we  all  are  responsible, — but  to  move  all  classes  to  join 
together  in  remedying  the  defects  of  our  present  indus- 
trial and  commercial  organization. 

The  evils  of  the  industrial  world  today  are  simply 
insufferable.  A  manly  self-respect,  as  well  as  a  wise 
philanthropy  and  the  love  of  justice  demand  that  they 
be  removed. 

The  supreme  conflict  to-day  is  not  between  capital 
and  labor,  nor  between  the  smaller  corporations  and  the 
larger  corporations,  but  between  that  new  Despotic 
Power,  which  has  established  itself  over  us,  and  the  whole 
people  of  these  United  States.  The  object  of  this  book  is 
to  show  how  the  domination  of  an  irresponsible  and  all- 
powerful  oligarchy  can  be  overthrown,  the  people  made 
supreme,  Industrial  warfare  abolished,  and  justice  and 
efficiency  established  within  our  whole  industrial  and 
commercial  life. 

The  plan  of  industrial  reform  unfolded  in  this  book 
was  wrought  out  prior  to  1897.  The  searching  ques- 
tions which  have  followed  many  addresses  given  on  the 
subject,  have  enabled  me  to  perfect  the  plan  in  detail 
and  meet  objections. 

Here  I  desire  to  thank  the  kind  friends  who  have 
aided  me  in  the  publication  of  this  book. 

DAVID  C.  REID. 


Part  I.     The  Present  Crisis. 

CHAPTER  I. 

JUSTICE  DETHRONED. 

The  conviction  is  taking  possession  of  all  minds  that 
we  are  approaching  a  crisis  in  the  development  of  our 
industrial  and  commercial  life  in  America — indeed,  in 
the  whole  world, — which  imperatively  demands  a  re- 
form, or  a  new  forward  step  in  our  industrial  evolution. 
For  two  important  indictments  are  made  against  our 
present  system. 

The  first  is  that  justice  as  a  governing  principle  has 
been  abolished  from  the  industrial  and  commercial 
world  and  in  its  place  has  been  enthroned  the  law  of 
the  might  of  the  strongest,  or,  that  might  makes  right. 

The  second  is  that  there  has  arisen  in  the  free  re- 
public of  these  United  States  a  new  despotic  power, 
greater  than  that  of  the  Caesars  of  old, — a  power  which 
threatens  to  reduce  the  whole  people  to  a  condition  of 
common  subjection  to  a  most  oppressive  tyranny.  I 
refer  to  the  irresponsible  Business  Corporation. 

Both  of  these  indictments  are  true;  and  both 
evils  which  they  represent  originated  historically  in  a 
common  source, — the  failure  on  the  part  of  the  people, 
at  the  beginning  of  their  national  history  or,  at  the 
proper  time  in  the  course  of  their  industrial  and  com- 
mercial evolution,  to  assume  resolute,  collective  control 
over  their  industrial  and  commercial  life. 

It  is  these  two  evils,  in  their  origin  and  results  that 
I  intend  to  discuss  in  the  first  Part  of  this  book. 


Z  EFFECTIVE    INDUSTRIAL    REFORM. 

In  the  explanation  of  any  system  of  human  society 
and  the  diagnosis  of  its  ills,  it  is  important  to  know — 
What  is  the  character  of  the  principle  lying  at  its  root. 

Now  it  is  a  simple  fact  that  the  very  principle  which 
lies  at  the  root  of  our  present  industrial  system  is  essen- 
tially vicious  and  of  necessity  leads  to  injustice,  spolia- 
tion, and  the  birth  of  despotic  power. 

Before  our  government  was  formed,  our  fathers  had 
become  wearied  with  governmental  monopoly  and 
special  privilege  granted  in  the  industrial  and  com- 
mercial world,  by  old-time  despotic  authority.  In 
order  to  raise  a  revenue,  it  was  customary  for  previous 
governments  to  grant  to  different  individuals,  special 
monopolies  on  different  articles  of  industry  and  com- 
merce,— the  government  of  course  would  receive  a  large 
percentage  of  the  profits  or  a  large  sum,  paid  outright 
for  the  privilege  granted. 

Now,  our  fathers  had  become  wearied  with  this 
despotic  policy.  And  when  they  founded  the  Ameri- 
can government,  by  a  natural  law  of  reaction,  they 
went  to  the  opposite  extreme,  and  repudiated  all  con- 
trol over  the  industrial  and  commercial  realm. 

Knowing  nothing  of  collective  control  on  the  part 
of  the  people,  they  said, — "Away  with  all  governmental 
interference  of  every  kind  in  the  industrial  world. 
Throw  every  man  onto  his  own  feet.  Let  competition 
be  free.  And  intrinsic  merit  will  win, — justice  will  be 
done, — and  all  will  be  well." 

They  thus  turned  the  whole  industrial  and  com- 
mercial world  over  to  the  free  exploitation, — the  ambi- 
tion,— the  warfare  of  individual  men.     They  called  this 


JUSTICE    DETHRONED.  6 

a  policy  of  liberty.  But  it  was  liberty  without  law, — 
liberty  with  no  organized  co-operation  or  general  con- 
trol. It  was  a  policy  of  pure  anarchism,* — identical 
with  the  policy  advocated  by  German  and  Russian 
anarchism  to-day.  And  this  is  the  policy  which  now 
lies  at  the  root  of  our  whole  industrial  and  commercial 
life.     And  out  of  this  policy  has  come  all  our  trouble. 

Justice  Dethroned. — Its  first  effect  has  been  to  de- 
throne justice  as  a  governing  principle  in  the  business 
world  and  enthrone  the  law  that  "might  makes  right." 

To  one  who  has  always  revered  the  present  com- 
petitive system  as  something  divine  and  infallible,  this 
indictment  may  appear  startling  and  untrue.  And  yet 
a  little  examination  proves  that  it  is  fully  sustained 
by  facts. 

For  that  laissez-faire,  anarchistic  policy  issued  im- 
mediately in  just  what  might  be  expected.  It  precipi- 
tated the  members  of  society,  at  once,  into  an  intense 
individualistic  struggle  and  compelled  each  man,  even 
when  inclined  to  fair-play,  to  adopt  for  his  motto 
the  uncompromising  law  of, — •"  Every  man  for  himself." 

It  was  as  if  the  wealthy  owner  of  a  rich  treasure- 
house  should  throw  the  doors  of  the  house  open  to  a 
crowd  of  men  and  say, — "All  these  treasures  are  yours. 
Now  every  man  for  himself.  To  the  strongest  belong 
the  spoils." 

We  can  well  imagine  the  violent  scramble  that  would 
ensue.  All  sense  of  justice  would  be  forgotten.  There 
would  be  pushing  and  hauling  and  shouting.  Blows 
would  be  struck.     Some  would  be  fortunate  and  grasp 

*The  term  anarchism  means — "no  government  control." 


4  EFFECTIVE    INDUSTRIAL    REFORM. 

much;  others,  crowded  out,  would  gain  nothing  at  all. 
Combinations  would  be  formed  by  the  strong  to  beat 
the  weak.  And  last  of  all,  a  few  men  would,  in  time, 
combine  to  get  possession  of  the  whole  treasure-house 
and  guard  all  its  wealth  for  their  own  special  use. 

This  is  just  what  has  taken  place  in  the  industrial 
world  during  the  little  more  than  one  hundred  years  of 
our  national  history. 

These  United  States  constitute  a  rich  treasure-house 
whose  treasures  are  ever  increasing  in  value  and  quan- 
tity. There  are  its  rich  lands  and  fertile  soil,  its  vast 
forests  of  lumber,  its  mines  of  ore  and  coal;  and  every 
new  industry  is  a  new  and  vast  treasure,  rich  in  divi- 
dends, to  be  exploited  for  human  gain. 

At  the  very  beginning  of  our  national  history,  the 
government  said  in  effect  to  the  people  of  these  United 
States, — 

"We  assume  no  control  over  your  industrial  life. 
All  these  treasures  are  yours.  They  belong  to  every 
body.     Let  each  man  plunge  in  and  get  all  he  can." 

The  result  has  been  the  creation  of  an  intense  in- 
dividualistic scramble.  In  the  general  struggle  all 
justice  has  been  forgotten.  Each  contestant,  even  when 
inclined  to  fair  play,  has  been  compelled,  as  I  have  said, 
to  adopt  the  motto  of:    "Every  man  for  himself." 

Thus  a  deadly  struggle  has  been  precipitated  be- 
tween man  and  man,  corporation  and  corporation,  and 
class  and  class.  And  the  general  law  forced  upon  all 
is  — 

"Let  him  take  who  hath  the  power 
And  let  him  keep  who  can." 


JUSTICE    DETHRONED.  5 

This  dethronement  of  justice  as  a  governing  prin- 
ciple in  the  industrial  world,  and  this  plunging  of  society 
into  a  mad  scramble  for  wealth, — was  emphasized  and 
justified  by  a  strange  error  into  which  our  fathers  fell. 

Having  abolished  all  governmental  interference  and 
adopted  the  policy  of  free  competition,  they  believed 
that  justice  would  be  self-acting.  "Let  us  throw  every 
man  onto  his  own  feet  and  keep  competition  free," 
they  said,  "and  the  law  of  supply  and  demand,  oper- 
ating with  intrinsic  merit,  will  issue  in  even-handed 
justice  everywhere."  "If  wages  get  too  high  com- 
petition will  quickly  bring  them  down.  If  they  get  too 
low,  the  absence  of  competition,  which  will  inevitably 
follow  a  reduction,  will  force  them  up  again." 

The  same  law,  they  said,  will  regulate  prices,  divi- 
dends, and  investments.  Thus  they  argued  that  under 
the  operation  of  free  competition,  justice  would  be  self- 
acting  and  justice  would  always  be  done. 

In  the  reaction  against  governmental  monopoly  and 
special  privilege,  our  fathers  looked  upon  free  compe- 
tition as  the  new  principle  that  would  bring  in  justice 
everywhere.  They  gave  it  the  most  exaggerated  power. 
They  exalted  it  as  the  heaven-ordained  law  that  must 
in  no  wise  be  interfered  with.  Obey  it  and  justice 
would  prevail. 

But  if  under  free  competition  justice  was  self-acting, 
what  was  the  logical  conclusion  as  to  the  use  of  con- 
science? The  conclusion  was  that  conscience  was  en- 
tirely unnecessary  in  the  industrial  and  commercial 
world.  Its  use  would  be  the  injection  of  an  artificial 
and,  therefore,  disturbing  factor,  disturbing  to  justice 


D  EFFECTIVE    INDUSTRIAL    REFORM. 

itself.  "If,"  they  said,  "you  want  justice  in  the  indus- 
trial and  commercial  world,  pay  no  attention  to  con- 
science, but  give  free  scope  to  the  operation  of  com- 
petition." "Buy  at  the  cheapest  market,  sell  at  the 
dearest."  "Pay  the  wages  that  competition  calls  for." 
"Do  not  bother  yourself  about  right  and  wrong,  and 
this  natural,  self-acting,  law  will  bring  about  even 
handed  justice  for  all." 

Thus  it  is  a  simple  fact  that  justice  was,  from  the 
very  first,  deliberately  and  rigidly  banished  as  a  deter- 
mining factor  from  the  industrial  and  commercial  world. 
It  was  banished,  indeed,  not  because  our  fathers  did 
not  believe  in  justice,  but  because  they  believed  that 
that  system  which  they  had  adopted,  in  the  place  of 
the  old,  would,  by  a  natural  and  inevitable  process, 
bring  justice  of  itself. 

Thus  conscience  was  drugged,  put  to  sleep,  by  this 
utterly  false  conviction.  The  result  was  that  men  en- 
tirely ceased  from  asking  what  is  just  and  right  in  any 
business  transaction.  They  only  asked, — what  is  the 
market  price?  Or,  what  does  competition  compel  me 
to  pay?  And  one  reason  why  we  cannot  persuade  men 
to-day  to  consider  questions  of  justice  in  relation  to 
wages,  prices,  or  the  distribution  of  wealth,  is  because 
they  are  still  under  the  domination  of  the  conviction, 
— utterly  false, — that  our  present  system  works  out, 
and  must  work  out,  even-handed  justice.  And  there- 
fore any  interference  on  our  part  will  be  an  artificial 
and  disturbing  influence. 

But  with  justice  banished  from  the  industrial  world, 
what  was  the  law  that  took  its  place?     It  was  the  law 


JUSTICE    DETHRONED.  7 

that — "Might  makes  right."  And  from  that  moment, 
wages  and  salaries,  opportunities  to  work  and  to  invest 
and  enter  business,  were  never  left  to  the  arbitrament  of 
justice  rationally  determined,  but  to  the  issues  and  arbi- 
trament of  the  general  struggle, — to  the  arbitrament,  in 
short,  of  the  relative  strength  of  the  parties  concerned. 

What  is  it  that  to-day  fixes  the  price  of  wheat  paid 
to  the  farmer?  What  but  the  relative  ability  of  the 
farmer  to  demand,  and  of  the  capitalist  buyer  to  pay, 
what  he  will? 

What  determines  the  compensation  or  wages  paid 
to  the  laborer?  What.,  but  the  relative  ability  of  the 
laborer  to  demand,  and  the  capitalist  employer  to  pay, 
what  he  pleases?  When  corporations  hire  men,  do 
they  ask, — -"What  wages  does  justice  demand?"  or — - 
"For  what  price  can  we  get  the  men?" 

What  determines  the  compensation  which  the  con- 
sumer shall  pay  for  food,  clothing,  coal,  rent,  gas,  or 
freight?  What  but  the  relative  ability  of  the  con- 
sumer, on  the  one  hand,  to  pay,  and  the  capitalist  seller 
to  demand,  what  price  he  will?  If  the  laborer  can,  at 
any  time,  force  from  his  employer  an  unjust  wage,  he 
considers  it  his  good  fortune  and  gladly  embraces  the 
opportunity.  Or  if  the  employer  can  force  the  laborer 
down  to  starvation  wages,  he  considers  it  his  right  to 
avail  himself  of  the  opportunity  which  "Providence" 
has  thrown  into  his  hands. 

Considerations  of  justice  never  enter  industrially 
into  any  of  the  above  transactions. 

Organized  Robbery. — But  not  only  was  the  prin- 
ciple of  justice  deliberately  banished  from  the  industrial 


8  EFFECTIVE    INDUSTRIAL    REFORM. 

world,  but  the  policy  which  our  fathers  adopted  invited 
dishonesty  and  created  the  predatory  spirit.  It  inevita- 
bly justified  and  enthroned  organized  robbery,  and 
made  it  a  regular  factor  in  the  industrial  and  commer- 
cial world. 

When  men  are  engaged  in  fierce  competitive  battle, 
the  temptations  to  dishonesty  are  very  great.  It  is 
inevitable  that  each  man  will  come  to  believe  that  all 
other  men  are  trying  to  beat  him,  and,  hence,  in  order 
to  win  he  must  try  to  beat  them.  The  result  is  that 
very  soon,  everywhere,  men  strive  to  get  some  special 
advantage  over  the  rest,  so  as  to  compel  them  to  pay 
their  price.  This  is  done,  at  first,  it  may  be,  in  self- 
defense.  But  what  is  done  at  first  in  self-defense  is 
soon  done  from  the  mere  greed  of  gain.  The  result  is 
that  to  organize  a  hold-up  over  the  people  comes  to  be 
a  regular  factor  in  the  game  and  is  regarded  as  perfectly 
justifiable,  in  view  of  prevailing  conditions.  And  when 
great  interests  are  at  stake,  men  do  not  hesitate  to 
bribe  legislatures,  violate  every  law  and  even  commit 
great  crimes  in  order  to  win. 

This  is  just  what  has  come  to  pass  in  these 
United  States.  Organized  robbery  has  come  to  be  a 
regular  factor  in  the  game.  Hence,  our  present  indus- 
trial system  says  to  the  capitalist, — "Send  your  ships 
to  Europe,  fill  the  country  with  immigrants  to  compete 
with  American  Labor.  Get  a  high  tariff  on  your  goods, 
but  keep  immigration  free.  Then  engage  men  to  work 
at  the  lowest  wages  that  hunger,  dependent  families 
and  fierce  competition  shall  force  them  to  take.  And 
even  to  these  young  girls  who  otherwise  should  arouse 


JUSTICE    DETHRONED.  9 

all  your  sense  of  chivalry,  show  no  mercy.  For 
that  is  business,  and  our  present  system  can  do  no 
wrong." 

It  says  to  every  set  of  men  who  have  the  power  to 
organize,  for  example,  a  gas  trust  or  an  electric  light 
monopoly, — "Go  ahead.  Organize.  Beat  down  com- 
petition.. Buy  up  the  city  council.  Get  a  'cinch'  on 
the  public.  Then  charge  as  high  a  price  for  your 
product  as  you  please.  It  is  your  industrial  right  to 
do  this.  Everyone  else  would  do  it  if  he  could.  You 
are  acting  only  upon  the  law  recognized  by  all." 

It  says  to  the  Coal  baron,  who  is  really  rendering  to 
the  public  in  this  great  co-operative  society  no  greater 
service  than  the  farmer  or  the  mechanic, — "Get  posses- 
sion of  all  the  coal  fields  in  the  country  at  a  mere  song. 
Pay  taxes  on  coal  lands,  worth  $25,000  an  acre,  as  if 
they  were  cheap  farm  lands  worth  only  $4  an  acre. 
Engage  labor  at  the  lowest  wage.  And  if  you  are  able 
to  mine  the  coal  so  that  the  whole  cost  of  the  coal  to 
you  is  less  than  $1.00  a  ton  and  then  sell  it  to  the  public 
for  from  $5  to  $10  a  ton,  it  is  your  industrial  right  to 
do  so.  You  are  acting  as  everybody  else  would  act  in 
your  place,  in  harmony  with  the  law  which  every  body 
has  freely  adopted.     For — 

"To  the  strong  belong  the  spoils,  and  to  the  power- 
ful belong  the  fruits  of  toil." 

Our  present  system  says  to  the  Business  Promoter, — 

"Organize  a  new  business  concern.  Put  into  the 
business  watered  stock  equal  to,  or  double  and  triple, 
the  actual  capital  invested.  And  then  cause  the  public 
to  pay  you  profits  on  this  watered  stock  so  that  you 


10  EFFECTIVE    INDUSTRIAL    REFORM. 

can  realize  a  dividend  of  30,  40,  50,  or  even  100  per 
cent  on  the  original  capital.     For  this  is  business. 

"Or  if  you  prefer,  when  you  have  thus  watered  the 
stock  to  twice  its  value,  sell  the  water  to  the  innocent 
public,  and  when  all  their  money  is  safely  secured  in 
your  own  pocket,  squeeze  the  water  out,  leaving  it  in 
the  possession  of  the  duped  public.  For  that  is 
business."  In  the  formation  and  administration  of 
every  large  business,  one  of  the  normal,  organic  features 
entering  into  it,  is  not  merely  to  produce  a  needed 
article  of  commerce,  but  to  organize  at  the  same  time, 
if  possible,  a  "hold-up"  over  the  people,  while  defending 
one's  self  against  being  held  up  by  some  other  organi- 
zation. The  one  supreme  concern  of  the  Standard  Oil 
trust,  and  every  other  monopoly,  is  to  destroy  all  com- 
petition so  as-  to  bring  the  public  into  their  grip  and  then 
dictate  prices  and  wages,  undeterred  by  any  principle 
of  justice  or  fair  play. 

Prof.  Edward  W.  Bemis  was  informed  by  those  who 
know  that  "if  a  man  should  go  to  Wall  Street  to 
float  some  new  industrial  enterprise,  demanding  sev- 
eral millions  of  dollars,  the  questions  which  capitalists 
would  ask  are, — "Have  you  a  patent  granting  you  the 
exclusive  use  of  some  important  machinery — or  have 
you  a  special  tariff  protection — or,  have  you  a  secret 
railroad  rate  giving  you  an  assured  advantage  over  all 
competitors, — or,  have  you  a  corner  on  some  limited 
source  of  necessary  raw  material, — as,  a  mine,  or  limited 
timber  lands, — or,  have  you  special  rates  of  taxation 
or  special  methods  of  evading  taxes? — If  you  have 
any   of  these,  we   are   willing   to   consider   your  enter- 


JUSTICE    DETHRONED.  11 

prise,  but  if  not,  we  can  have  nothing  to  do  with  it." 
In  relation  to  the  same  matter,  it  should  be  said 
that  certain  directors  of  the  Standard  Oil  trust  affirmed 
that  they  would  give  almost  any  price  for  a  monopoly, 
but  would  pay  only  the  cost  of  re-duplication  for  a  com- 
petitive business. 

Thus  our  industrial  and  commercial  system  has 
been  converted  into  an  agent  of  organized  robbery. 
The  members  of  society,  plunged  into  a  mad  strug- 
gle for  wealth,  have  flung  the  last  shred  of  conscience 
to  the  winds.  Justice  has  been  completely  dethroned. 
Strong  men  deliberately  rise  to  the  top  by  ruthlessly 
trampling  on  the  necks  of  those  below  them.  The 
members  of  society  have  been  plunged  into  a  con- 
dition of  merciless  war.  Man  struggles  with  man  and 
corporation  with  corporation.  And  last  of  all  the  in- 
dustrial world  has  been  rent  asunder  into  two  mercilessly 
warring  bodies,— Capital  and  Labor, — each  of  which 
knows  no  law  but  the  mad  determination  to  beat  the 
other,  at  whatever  cost  to  themselves  and  injury  to 
society,  while  the  farmer  is  crushed  under  the  heavy 
heel  of  both. 


CHAPTER  II. 

THE  NEW  DESPOTISM— ITS  RISE. 

But  the  evil  fruits  of  that  anarchistic  policy  inno- 
cently adopted  by  our  fathers,  did  not  stop  with  the 
evils  narrated  in  the  preceding  chapter.  The  unprin- 
cipled "warfare  of  man  with  man  and  class  with  class, 
always  gives  birth  to  that  portentous  thing,  the  organ- 
ized tyranny  of  the  Man  and  the  gang  at  the  top,  who 
grasp  at  all  power  and  rule  all  with  relentless  sway. 

This  is  just  what  has  taken  place  in  these  United 
States. 

When  our  government  was  formed,  the  people,  as 
I  have  before  declared,  repudiated  all  collective  control 
over  their  industrial  and  commercial  activities.  But  no 
people  can  repudiate  collective  control  over  their  own 
affairs,  and  escape  the  fate  of  subjection  to  despotic 
power.  For  if  the  people  will  not  take  firm  control 
over  their  own  affairs,  sooner  or  later  some  irresponsible 
combination  of  men  will  take  firm  control  for  them 
and  rule  them  with  despotic  sway. 

As  I  have  shown  in  the  preceding  chapter,  the  first 
effect  of  repudiation  of  all  collective  control  over  in- 
dustrial affairs,  was  the  plunging  of  society  into  a  con- 
dition of  industrial  and  commercial  war,  from  which 
every  consideration  of  justice  was  abolished.  There 
was  and  is  simply  a  fierce  competitive  struggle  for 
wealth,  in  which  the  weak  are  ruthlessly  trampled  down 
by  the  strong,  and  there  is  no  such  thing  as  justice  in 
regard  to  opportunity  to  work,  wages,  salaries,  income, 
and  opportunity  to  invest. 


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A  Villa  in  the  Berkshires. 


The  Westinghotjse  Summer  Residence. 

This  villa  overlooks  Laurel  lake  and  is  surrounded  by  extensive 
grounds  of  many  acres,  kept  beautiful  and  in  perfect  repair  by 
companies  of  working  men. 

Many  of  the  estates  in  the  Berkshires  embrace  hundreds  of  acres, 
abounding  in  beautiful  groves,  artificial  ponds,  drives,  meadows, 
secluded  walks,  and  mountain  forests. 


THE    NEW    DESPOTISM ITS    RISE.  13 

But  the  evil  did  not  end  here. 

While  the  people  have  been  warring  with  each 
other, — man  with  man  and  class  with  class, — a  strong 
group  of  men  have  been  quietly  laying  hold  of  every 
source  of  power.  They  have  gotten  possession  of  this 
vantage  ground  and  of  that;  of  this  commanding 
industry  and  that  citadel  of  commercial  supremacy; 
they  have  quietly  consolidated  their  power  until,  to-day, 
they  actually  or  practically  hold  possession  of  the 
whole  industrial  and  commercial  activities  and  oppor- 
tunities of  the  country. 

The  agent  through  which  they  have  consolidated 
and  now  wield  this  Imperial  power  is  the  modern,  ir- 
responsible Business  Corporation. 

The  business  corporation  is  no  new  thing  in  the 
world.  Like  civil  government  it  has  existed  in  essence 
ever  since  the  beginning  of  civilization.  For  wherever 
two  or  more  men  have  joined  together  for  co-operative 
effort  in  the  industrial  and  commercial  world,  there 
was  the  business  corporation  in  essence.  But  while  the 
business  corporation  is  very  old  in  essence,  its  modern 
form  and  vast  magnitude  are  entirely  new. 

In  former  years,  when  everything  was  manufactured 
by  hand,  when  transportation  was  slow  and  communi- 
cation difficult,  the  stock  company,  the  business  cor- 
poration, was  necessarily  small  and  insignificant.  But 
with  the  evolution  of  the  vast  factory  system  and  the 
development  of  our  vast  railways,  telegraphs  and  tele- 
phones, the  business  corporation  has  assumed  a  magni- 
tude and  a  power  comparable  with,  if  not  greater  than, 
that  of  civil  government.     For  the  business  corporation 


14  EFFECTIVE    INDUSTRIAL    REFORM. 

has  come  to  be  in  the  business  world  what  civil  govern- 
ment is  in  the  political  world;  it  is  the  agent  through 
which  all  industrial  and  commercial  activities  are  con- 
solidated and  brought  under  the  control  of  one  unified 
power.  And  as  all  political  power  in  the  United  States 
has  become  unified  and  concentrated  under  one  civil 
government  which  rules  from  the  Atlantic  to  the  Pacific, 
so  all  the  industrial  and  commercial  activities  in  the 
United  States  have  become,  actually  or  practically, 
consolidated  and  unified  into  one  vast  Business  System 
or  corporation,  which  wields  a  power  greater  than 
government  itself. 

Now,  it  is  evident,  that  such  a  power,  so  vast,  so 
potent  for  good  or  evil,  should  be  directed  and  control- 
led only  by  the  sovereign  will  of  the  people.  But 
it  is  a  simple  fact  that,  however  accomplished, 
the  control  of  the  Business  Corporation  is  held  in  the 
strong  grasp  of  a  few  irresponsible  men — a  small  group 
whose  membership,  indeed,  is  ever  changing  but  whose 
despotic  control  is  continuous  and  ever  increasing  in 
magnitude. 

They  rule  the  whole  business  world  with  almost 
unrestricted  sway.  They  hold  positions  of  almost  ab- 
solute power,  and  yet  are  responsible  to  no  man,  either 
for  the  exercise  of  that  power  or  its  duration.  They 
wield  a  power  greater  than  Tamerlane's,  and  the  people 
are  utterly  helpless  in  their  grasp.  In  utter  contempt 
of  the  people's  rights,  they  aim  at  nothing  short  of 
obtaining  absolute  ownership  and  control,  of  the  whole 
wealth  and  Industrial  power  of  the  country, — indeed, 
of  the  world, — making  the  whole  minister  to  their  will. 


THE    NEW    DESPOTISM ITS    RISE.  15 

They  have  dared  to  invade  the  sacred  halls  of  legis- 
lation,— in  city,  state  and  nation, — and  they  have  cor- 
rupted and  bribed  law-makers  regularly,  in  the  interests 
of  corrupt  corporations.  The  people's  liberties  have 
been  threatened.  For  while  having  the  form  of  popular 
government,  yet  government  is  prostituted  to  the  in- 
terests of  the  few;  and  through  the  necessities  for  food 
and  clothing — owned  by  the  few — the  rest  of  the  people 
are  brought  into  a  condition  of  subjection  to  those 
who  have  thus  grasped  all  power. 

An  article  appeared  in  1906  in  "  The  World's  Work" 
describing  political  conditions  in  Venezuela.  From  the 
moment  that  one  enters  the  harbor  of  La  Guayra,  every- 
where he  feels  the  presence  of  "the  Man  and  the  Gang" 
at  the  top, — says  the  writer.  Their  creatures  are  every- 
where and  at  every  turn  he  has  to  pay  toll.  This 
Man  with  his  associates  though  he  gives  himself  high- 
sounding  titles  and  talks  of  patriotism  and  all  that,  is 
but  the  head  of  a  band  of  plunderers,  fattening  at 
public  expense.  And  he  will  remain  in  power  until 
another  man  with  another  gang  appears  able  to  thrust 
him  out.  But  whatever  changes  may  take  place,  it  is 
always  the  Man  and  the  Gang  that  are  in  control,  and 
it  is  the  people  who  are  ruthlessly  plundered. 

The  same  condition  prevails  in  the  United  States  in 
the  industrial  realm.  We  have  long  ago  discovered  the 
man  and  the  gang  in  the  political  realm.  But  we  are 
coming  to  see  that  these  are  but  the  creatures  of  a 
larger  Man  and  a  stronger  combination,  whose  exist- 
ence has  been  only  recently  discovered.  For  wherever 
we  go,  into  whatever  department  of  industrial  life  we 


16  EFFECTIVE    INDUSTRIAL    REFORM. 

enter,  we  feel  everywhere  the  presence,  the  absolute 
power  of  the  Man  and  the  combination  of  men  who 
control  all. 

A  certain  writer  says  that  there  are  450  trusts  in 
the  United  States,  which  control  nearly  all  our  indus- 
trial life.  But  as  a  matter  of  fact,  these  450  trusts  are 
coming  to  be  but  different  ramifications  of  one  great 
trust  under  the  control  of  the  same  industrial  magnates. 
For  the  same  men  are  largely  in  all  these  trusts.  "Mr. 
Stuyvesant  Fish  in  an  address,  pointed  out  that  while 
there  are  thousands  of  directors  in  the  great  corpora- 
tion of  the  United  States,  yet  the  number  of  men  who 
bear  the  majority  of  the  directorates  is  very  small. 
The  trustees  of  three  great  life  insurance  corporations 
alone  held  more  than  one  thousand  four  hundred  direc- 
torates."* Chauncey  M.  Depew  at  the  time  of  the  uncov- 
ering of  the  Insurance  scandals  was  director  in  79  different 
corporations.  The  men  who  are  at  the  head  of  Stand- 
ard Oil,  are  also  manipulators  of  Amalgamated  Copper; 
and  the  men  in  Amalgamated  Copper  are  interested  in 
the  mines,  and  own  the  railroads;  and  the  men  who 
own  the  railroads  will  be  found  interested  in  the  Beef 
trust.  And  so  it  is.  All  our  industries  are  in  the  con- 
trol of  the  same  group  of  irresponsible  financiers.  And 
though  there  sometimes  arise  quarrels  among  the  mem- 
bers of  the  group,  yet  they  have  learned  the  necessity 
of  keeping  their  quarrels  out  of  sight  and  combining 
to  fleece  the  people. 

Thus  we  see  that  our  industrial  policy,  beginning 
historically  in  a  competitive  individualism,  has  issued 

*See  World's  Work,  July  number  1904,  page  1772. 


THE    NEW    DESPOTISM ITS    RISE.  17 

in  an  overtowering  plutocracy,  which  all  history  shows 
is  essentially  vicious  and  leads  inevitably  to  oppression 
and  spoliation.  For  all  history  shows  that  there  is  no 
evil  against  which  the  people  should  be  more  alert  than 
the  insidious  encroachments  of  despotic  power.  For 
despotic  power  not  only  despoils  its  victims,  but  de- 
prives them  of  all  power  of  resistance.  It  gradually 
destroys  freedom  of  speech,  it  degrades  the  mind  and 
thrives  on  the  degradation  of  the  people.  It  destroys 
all  virility  of  character.  And  unless  its  encroachments 
are  speedily  resisted,  it  soon  so  reduces  its  victims  that 
all  successful  resistance  is  impossible.  Such  are  the 
effects  which  we  are  already  beginning  to  experience  as 
a  result  of  the  operation  of  that  despotic  power  which 
has  fastened  itself  upon  us. 


CHAPTER  III. 

THE  NEW  DESPOTISM— ITS  MIGHT. 

It  is  difficult  for  the  people  of  this  free  republic, 
accustomed  to  regard  themselves  as  supreme  over  their 
own  affairs,  to  be  convinced  that  such  a  despotic  power 
as  I  have  described  has  arisen  among  them.  And  yet 
that  this  new  Imperialism  is  terribly  real  and  wields  a 
p*ower  comparable  with  that  of  the  Csesars  of  old,  is 
seen  upon  a  little  consideration  of  the  facts  in  the  case. 

First  Element  of  Its  Power. 

In  the  first  place,  it  can  be  seen  that  this  new 
power  fixes  all  wages  and  salaries,  indeed,  the  income 
of  all  classes  with  despotic  sway  and  gives  its  favorites 
the  lion's  share. 

In  proof  of  this  wrong,  one  has  but  to  compare  the 
income  of  the  Trust  magnate  and  promoter,  with  the 
wages  and  salaries  of  the  working  man  or  the  income 
of  the  farmer  and  others. 

Figures  are  generally  uninteresting  things,  but  the 
following  list  of  the  salaries  paid  to  the  presidents  of 
some  of  our  big  corporations  should  be  carefully  weighed. 

In  weighing  them,  it  should  be  borne  in  mind 
that  every  dollar  paid  to  these  men  must  come  out  of 
the  common  earnings  of  the  people ;  and  if  one  class  re- 
ceives more  than  its  share  of  these  common  earnings, 
another  class  must  receive  less  than  its  share.  If  there 
are  six  apples  to  be  divided  between  two  boys,  and  one 
boy  appropriates  four  of  the  six,  then  the  other  boy  can 
receive  only  two. 


Morris  K.  Jessup  Villa,  Lenox,  Mass. 

Morris  K.  Jessup  (now  deceased)  was  president  of  the  New 

York  Chamber  of  Commerce.     His  charitable  and  religious 

benefactions  were  widely  known. 


THE    NEW    DESPOTISM — ITS    MIGHT.  19 

SALARIES  OF  SOME  BIG  CORPORATIONS. 

1.  Insurance  Societies. 

The  New  York  Mutual  Life $150,000. 

The  Equitable 100,000. 

The  New  York  Life 100,000. 

Note. — These  were  the  salaries  before  the  investi- 
gation in  1904.  They  have  been  reduced  since.  But 
they  were  reduced  only  under  the  strong  pressure  of 
public  sentiment. 

2.  Big  Railroad  Presidents — 

Pennsylvania  Railroad  Co $75,000. 

Chicago  Rock  Island  and  Pacific  Ry.  Co 50,000. 

Pennsylvania  &  Reading  Ry.  Co 50,000. 

New  York  Central  &  Hudson  River  Ry.  Co. . . .  50,000. 

Great  Northern  Ry.  Co 50,000. 

Southern  Ry.  Co 50,000. 

Erie  Ry.  Co 40,000. 

Lehigh  Valley  Ry.  Co 40,000. 

Atchison  System  (Sante  Fe) 40,000. 

Chicago  and  Northwestern  Ry.  Co 40.000. 

3.  Express  Companies — 

Adams  Express  Co 50,000. 

United  States  Express  Co 50,000. 

American  Express  Co 50,000. 

4.  Bank  Presidents — 

National  City  Bank,  New  York 60,000. 

First  National  Bank,  Chicago 40,000. 

Aggregate  salary  of  18   men $1,085,000. 


20  EFFECTIVE    INDUSTRIAL    REFORM. 

Does  any  one  believe  that  these  men  earn  these  vast 
salaries?  2170  men  have  to  be  taxed  $500  apiece  to  pay 
those  18  men  their  salaries.  Do  we  not  believe  that  if  we 
had  public  ownership,  by  some  appropriate  method,  we 
could  engage  men  to  do  their  work  at  a  less  price  ?  The 
president  of  the  Bank  of  London  receives  only  $10,000 
a  year.  Why  should  we  pay  to  the  president  of  the 
National  City  Bank  of  New  York  a  salary  of  $60,000? 

The  talents,  business  ability,  and  tact  needed  to 
run  a  large  university  are  probably  as  great  as  those 
requiring  to  run  a  railroad,  and  yet  the  salary  paid 
to  the  president  of  Harvard  University  is  only  $7,130 
and  house.* 

But  the  salaries  paid  to  these  men  in  high  finance 
do  not  by  any  means  represent  all  their  income,  paid 
to  them  by  the  public.  The  salaries  of  these  men  are 
often  concealed.  They  are  sometimes  designedly  made 
very  small  in  order  to  deceive  the  people.  But  they 
come  back  to  the  officials  in  the  form  of  commissions, 
dividends,  graft,  and  other  profits.  In  order,  there- 
fore, to  learn  the  compensation  of  many  of  these  men 
we  must  bring  before  our  minds  their  whole  income 
and  even  the  earnings  of  a  life  time. 

Let  us  for  a  moment  compare  the  compensation  of 
the  farmer  with  that  paid  by  the  country  to  a  well- 
known  Steel  magnate. 

♦The  salaries  of  some  college  presidents  are  as  follows : 

Harvard $7,130 

Yale 7,500 

Wisconsin  State  University 7,000 

The  smaller  colleges  less  than 5,000 

Compare  these  with  the  salaries  of  the  corporations. 


THE    NEW    DESPOTISM ITS    MIGHT.  21 

A  young  man  who  begins  life  to-day  as  a  farmer 
and  is  industrious  and  skillful  does  well,  if  after  30 
years  of- the  severest  toil,  he  is  worth  $6,000. 

That  means  that  to  the  farmer  who  supplies  bread 
and  meat  and  milk  to  the  community,  we  pay  for  his 
services  besides  his  living — which  is  a  meager  one — 
the  compensation  of  $200  a  year  for  30  years.  This 
embraces  wages  and  dividends.  Not  a  very  exorbi- 
tant reward  for  all  the  toil  and  service  which  he 
renders. 

But  what  did  we  pay  to  the  Steel  magnate  for  his 
work  of  running  a  Steel  Bridge  company  and  organiz- 
ing the  Steel  Trust? 

It  is  said  that  this  Steel  king  was  worth  when  he 
went  out  of  the  business  some  $300,000,000.  Let  us 
assume  that  he  made  that  sum  during  the  last  thirty 
years  of  his  business  career.  Then,  according  to 'this 
rough  estimate,  we,  the  people  of  these  United  States, 
paid,  in  effect,  this  Steel  magnate  annually  for  his  ser- 
vices in  the  iron  business  on  an  average,  the  sum  of 
ten  millions  ($10,000,000) — and  paid  this  every  year 
for  thirty  years.  This  of  course  included  his  salary, 
dividends  and  other  profits. 

It  is  almost  impossible  to  grasp  this  sum  as  compared 
with  the  $200  paid  every  year  to  the  farmer.  Suppose, 
therefore,  that  we  think  of  it  in  terms  of  the  salary 
which  we  paid  to  the  President  of  the  United  States. 
For  however  great  be  the  services  rendered  by  the 
Steel  magnate,  we  hardly  think  that  any  one  will  say 
that  they  were  greater  in  value,  or  required  a  larger 
complement  of  powers,  than  those  of  our  President. 


22  EFFECTIVE    INDUSTRIAL    REFORM. 

We  paid  our  President  in  those  years  for  his  vast  and 
varied  services  as  head  of  this  nation  $50,000*  per  year, 
what  do  or  did  we  pay  to  the  Steel  king?  Two  hundred 
times  $50,000  or  $10,000,000  a  year.  In  order  to  grasp 
what  this  means,  we  must  obtain  a  visual  representation 
of  these  different  sums.  If  we  should  place  a  $50,000 
bill  in  the  left  hand  to  represent  the  president's  salary, 
we  would  have  to  pile  two  hundred  $50,000  bills  in  the 
other  hand  to  represent  the  yearly  income  of  the  Steel 
king.  Or  if  we  should  write  the  amount,  $50,000  on  one 
page  to  represent  the  president's  salary,  we  would  have 
to  write  the  same  symbol  two  hundred  times  on  the  oppo- 
site page  to   represent  the  Steel  king's  yearly  income. 

Thus  — 
Salary  of  the  President  of  the  United  States: 


$50,000 


Paid  every  year  for  four  or  eight  years. 

Compare  this  now  with  what  we  paid  the  Steel  king 
for  his  yearly  services  as  given  on  the  next  page. 


*This  was  the  president's  salary  prior  to  1909,  when  it  was 
raised  to  $75,000  a  year. 


THE    NEW    DESPOTISM ITS    MIGHT.  23 

Average  Yearly  Income  of  the  Steel  King. 

$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 
$50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000  $50,000 

200  times  $50,000. 
Paid  in  effect  every  year  for  thirty  years. 

These  astounding  figures  are  not  exaggerations. 
They  have  been  gathered  from  the  most  reliable  sources. 
We  challenge  any  one  to  show  that  they  are  not  strictly 
true.  Indeed,  these  figures  do  not  tell  the  whole  story; 
for  there  are  men  of  wealth,  whose  aggregate  income  is 
three  and  four  times  that  of  the  Steel  King  just  cited, 
or  from  $30,000,000  to  $40,000,000  a  year. 


24  EFFECTIVE    INDUSTRIAL    REFORM. 

As  we  look  at  these  figures,  can  we  not  easily  learn 
why  nine-tenths  of  the  people  are  in  poverty  while  the 
rest  are  fabulously  rich?  Can  we  not  readily  under- 
stand why  young  girls  in  our  cities  must  work  for  most 
meager  wages  and  the  locomotive-driver,  the  mechanic, 
— all  artisans,  and  all  teachers  must  labor  on  a  barely 
living  wage  or  salary?  Can  we  not  understand  why 
prices  are  rising  higher  and  higher?  Is  it  not  because 
we  pay  such  immense  sums  to  these  princes  of  high 
finance  and  their  families  that  there  is  little  left  for  the 
working  man,  the  working  girl,  the  teacher,  the  scien- 
tist, and  the  college  Professor? 

Dr.  Charles  B.  Spahr  declares  that  one-eighth  of  the 
families  in  America  receive  more  than  one-half  of  the 
aggregate  income,  and  the  richest  one  per  cent  receives 
a  larger  income  than  the  poorest  50  per  cent.* 

And  whence  arises  this  vast  injustice  in  relation  to 
wages  and  incomes?  It  arises  from  the  simple  fact  that 
the  Industrial  magnates  in  control  of  the  Corporation, 
fix  all  wages  and  salaries  with  despotic  power  and  take 
to  themselves  the  lion's  share.  For  who  is  it  that  to-day 
determines  the  wages  paid  to  both  skilled  and  unskilled 
labor?  It  is  the  irresponsible  corporation.  Who  is  it 
that  by  determining  all  prices  received  by  the  farmer 
for  his  wheat,  cattle,  cotton  and  tobacco,  fixes  the  in- 
come of  the  farmer?  Again,  it  is  the  irresponsible 
corporation.  Who  is  it  that  by  setting  the  price,  fixes 
indirectly,  the  salary  of  the  school  teacher,  the  college 
professor,  and  the  minister  of  the  Gospel?  and  who  is  it 

*See  Spahr's  Present  Distribution  of  Wealth  in  the  United 
States 


THE    NEW    DESPOTISM ITS    MIGHT.  25 

that  determines  the  salary  and  other  perquisites  of  the 
Magnates  themselves  and  their  henchmen?  It  is  a 
simple  fact,  as  every  intelligent  man  knows,  that  all 
these  wages  and  incomes  received  by  these  different 
classes  are  fixed,  and  fixed  with  despotic  power  by  the 
magnates  themselves  who  are  in  control  of  the  corpora- 
tion, and  they  fix  all  to  their  own  profit  and  advantage. 

There  are  two  sources  of  this  power. 

First — All  jobs, — or  nearly  so, — are  in  control  of  the 
corporation;  and  Second — Immigration  is  practically 
free.  For  every  job  there  stands  a  man  or  a  woman  from 
the  old  world  depressed  by  ages  of  tyranny,  ready  to 
take  the  job  at  any  price.  The  result  is  that  the  in- 
dustrial magnate  can  say  to  every  American,  "Take 
this  job  at  my  price  or  leave  it."  And  though  in  America 
to-day,  we  are  doing  industrial  team-work,  and  every 
man  should  have  the  right  to  be  heard  equally  with 
every  one  else  as  to  what  wages  should  be,  yet 
in  the  presence  of  the  industrial  magnate  he  is  utterly 
helpless. 

And  the  most  serious  thing  to  be  considered  in  this 
matter  is  this  fact  that  this  difference  in  wages  and  sal- 
aries is  fixed  by  despotic  power  and  the  people  have  no 
means  of  effective  protest.  For  if  this  despotic  power 
continues  where  will  spoliation  end?  Will  not  this 
reduction  of  the  wages  of  working  men,  these  low  prices 
paid  to  the  farmer  and  the  small  incomes  received  by 
other  classes,  continue  until  all  the  people, — working 
men,  farmers,  and  others — are  reduced  to  the  level  of 
the  depressed  peasantry  of  Europe  and  there  will  be 
no  redress? 


26  EFFECTIVE    INDUSTRIAL    REFORM. 

Here,  then,  is  the  first  element  of  this  new  Imperial 
power.  It  fixes  all  wages  and  salaries  with  despotic 
sway.  The  possession  of  this  power  alone  is  sufficient 
to  condemn  the  present  system  as  destructive  of  justice 
and  tending  to  reduce  the  people  to  complete  servitude. 
For  whosoever  is  able  to  fix  despotically  the  wages  and 
salaries  of  the  people,  holds  the  very  life  of  the  people 
at  his  mercy.  No  man  nor  any  group  of  men  should 
be  allowed  to  hold  such  power.  And  yet  such  is  the 
power  that  is  held  and  exercised  to-day  by  the  Irre- 
sponsible Corporation. 

But  this  does  not  tell  the  whole  story  of  this  new 
Despotism. 

Second  Element  of  Its  Power. 

In  the  second  place  this  new  despotic  power  is  able 
to  determine  with  unrestricted  sway,  who  shall  work 
and  who  shall  not  work, — who  shall  enter  into  busi- 
ness and  who  not, — and  who  shall  mount  to  positions 
of  influence  and  power  in  the  business  corporation  and 
who  remain  at  the  bottom. 

As  I  haVe  already  intimated,  all  jobs  are  held  in  the 
control  of  the  corporation.  If  a  man  wants  work  in  the 
shoe  factory  or  the  paper-mill  or  in  the  cotton  factory, 
he  must  seek  it  at  the  door  of  the  corporation.  He 
may  be  engaged  or  turned  down  at  its  pleasure,  and  for 
him  there  is  no  redress.  The  corporation  may  turn  off 
a  whole  army  of  working  men  whose  labors  have  built 
up  the  business,  and  it  may  bring  in  a  whole  army  of 
immigrants  for  no  other  purpose  than  to  force  wages, 
already  depressed,  to  a  still  lower  level.     The  despotic 


THE    NEW    DESPOTISM — ITS    MIGHT.  27 

corporation  cares  nothing  for  the  welfare  of  the  immi- 
grant or  the  rights  of  the  working  man  already  here. 
It  sets  the  one  in  competition  with  the  other  and  there- 
by despoils  both.  If  those  in  control  are  dissatisfied 
with  any  man  for  his  political  views  or  socialistic  ten- 
dences,  they  can  discharge  him  and  give  no  reason 
therefor,  except  their  own  will  that  he  should  go. 
And  these  men  at  the  head  of  the  corporations,  elect 
themselves  to  office,  dictate  their  own  salaries  and  other 
perquisities,  and  hold  their  positions  at  their  own  will. 

When  the  panic  in  1907-8  occurred,  the  corporations 
turned  off  hundreds  of  thousands  of  men.  But  not  one 
word  was  said  about  turning  off  some  of  those  high 
officials  whose  mismanagement,  dishonesty  and  graft 
had  caused  the  panic.  They  were  immune.  The  wages 
of  hundreds  of  thousands  of  working  men  were  reduced , 
although  they  were  then  receiving  wages  far  below  the 
demands  of  justice.  But  nothing  was  said  about  re- 
ducing the  salaries  of  those  men  in  high  finance,  though 
some  of  them  were  receiving  as  high  as  $75,000  a  year. 
These  princes  of  high  finance  hold  their  positions  at 
their  own  will,  however  incompetent,  corrupt,  and  pre- 
daceous  they  may  be.  But  the  people  are  taken  on 
or  turned  off  to  starve  with  no  voice  whatsoever  in  the 
matter. 

But  the  power  of  the  corporation  in  this  matter  does 
not  end  here.  No  man  to-day  can  enter  into  any  large 
business  enterprise  except  on  the  permission  of  the  large 
corporation. 

A  young  man  in  the  East  with  sufficient  capital 
proposed  to  his  uncle,  who  was  well  experienced  in  the 


28  EFFECTIVE    INDUSTRIAL    REFORM. 

West,  that  he  (the  young  man)  should  establish  a  bank 
in  some  Western  town. 

But  the  uncle  warned  him  to  be  careful  what  he 
did.  "For,"  said  he,  "Eastern  capitalists  now  have 
their  agents  in  all  the  West  who  keep  their  eyes  upon 
all  the  places  favorable  for  banking,  and  unless  you 
have  a  strong  backing  they  will  wait  until  you  get  your 
plant  established,  and  then  they  will,  by  their  superior 
capital,  run  you  out  and  ruin  you.  They  mean  to  hold 
all  such  fields  open  to  themselves  alone." 

A  young  man,*  in  a  small  town  in  Massachusetts, 
well  acquainted  with  a  certain  wire  needed  in  the  manu- 
facture of  Card-clothing,  resolved  to  go  into  the  manu- 
facture of  that  particular  wire.  He  felt  that  by  his 
knowledge  of  the  wire  needed  and  the  methods  of  its 
manufacture,  he  could  produce  it  at  a  lower  cost  than 
any  other  establishment. 

He,  therefore,  bought  his  machinery  and  began  to 
build  his  plant.  But  there  was  a  large  Wire  Corpora- 
tion in  the  neighboring  city  which,  although  worth 
millions,  was  determined  to  hold  all  the  wire  business 
for  its  own  particular  benefit.  They,  therefore,  quietly 
waited  until  the  young  man  had  his  plant  established. 
Then  the  large  corporation  immediately  placed  its  price 
on  that  particular  wire  at  such  a  low  figure  that  the 
young  man  could  not  manufacture  it  except  at  a  loss. 
They  thus  drove  him  out  of  the  business.  And  in  the 
end  the  improved  machinery,  for  which  the  young  man 
had   paid   twenty   thousand   dollars,    was   sold   to   the 

*The  writer  is  personally  acquainted  with  the  persons  included 
in  this  transaction,  and  knows  the  facts.     And  it  is  typical. 


THE    NEW    DESPOTISM ITS    MIGHT.  29 

Trust  that  had  crushed  him  for  the  nominal  sum  of 
two  thousand  dollars. 

A  few  years  afterward  the  two  men  who  owned  the 
Trust  sold  out  to  the  United  States  Steel  Company  for 
$8,000,000  cash.  Here  we  see  that,  although  making 
their  eight  millions,  yet  they  would  allow  no  one 
else  to  share  in  the  same  profitable  enterprise.  They 
wanted  it  all.  And  with  uplifted  club  they  said  to 
every  man  who  should  presume  to  go  into  the  wire 
business,  "Enter  if  you  dare." 

So  it  is  with  every  other  business.  It  is  under  the 
absolute  control  of  the  men  who  are  in  power  in  the 
industrial  world.  The  door  of  opportunity  is  open  only 
to  themselves  and  those  whom  they  elect  to  enter. 

Finally.  In  every  corporation,  it  is  taken  for  granted 
that  the  son  or  other  near  relative  of  those  in  control 
is  to  be  advanced  over  all  others  to  positions  of  influence 
and  profit.  And  this  is  done  again  and  again  to  the  in- 
jury of  the  industry  concerned. 

But  the  whole  story  of  the  Despotic  Corporation  has 
not  yet  been  told. 

Third   Element  of  Its  Power 

The  irresponsible  Business  Corporation  fixes,  to  its 
own  profit  with  despotic  power,  all  prices  and  the 
quality  of  commodities  paid  for. 

If  the  people  should  have  justice  in  relation  to  wages 
and  salaries,  they  should  also  have  justice  in  relation 
to  prices  and  the  quality  of  the  goods  received.  Now 
it  is  a  simple  fact  that  all  prices  on  meat,  flour,  coal, 
cotton  and  woolen  goods  and  all  other  commodities  are 


30  EFFECTIVE    INDUSTRIAL    REFORM. 

fixed,  either  directly  or  indirectly,  by  the  business  mag- 
nates in  control  and  this  to  their  own  advantage.  They 
thus  extort  a  tribute  from  the  people  every  time  that 
any  one  buys  a  pound  of  meat,  or  a  barrel  of  flour,  or  a 
gallon  of  oil,  or  a  ton  of  coal. 

The  result  is  that  prices  in  the  aggregate  have  risen 
to  an  appalling  height  within  the  last  few  years.  It 
is  estimated  that  the  cost  of  meat  since  the  formation 
of  the  Beef  Trust  in  1903  has  increased  from  30%  to 
50%;  while  the  price  paid  to  the  cattle  raiser  has  de- 
creased from  20%  to  30%.*  And  the  general  cost  of 
living  has  increased  from  40%  to  50%.  Even  where 
there  has  been  a  lowering  of  prices,  the  decrease  has 
not  kept  pace  with  the  decreased  cost  in  its  production 
and  the  increased  demand  in  its  consumption.  And 
prices  are  frequently  raised  by  the  corporation  arbi- 
trarily for  no  reason  except  the  greed  of  gain.  When 
the  War  between  Russia  and  Japan  broke  out  in  1903, 
the  price  of  flour  was  immediately  advanced  $1.00 
a  barrel,  and  that  for  no  reason  except  that  the  war 
gave  the  magnates  the  power  to  make  the  demand. 
They  said  to  the  people  of  the  United  States, — "Pay 
our  price  or  we  will  send  the  flour  across  the  Pacific." 
Now  is  it  right  for  any  class  of  men  to  hold  such  des- 
potic power?  Is  it  right  for  the  people  to  be  thus  rob- 
bed after  the  manner  of  the  stage  coach  by  the  high- 
way robber? 

And  then  there  is  the  dishonest  adulteration  of  goods, 
and  all  to  the  profit  of  the  bandit  gentlemen  in  con- 

*See  Greatest  Trust  in  the  World,  Chap.  X. — by  Chas.  E.  Rus- 
sell. 


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THE    NEW    DESPOTISM ITS    MIGHT.  31 

trol.  There  is  adulterated  tea,  and  adulterated  coffee, 
adulterated  sugar  and  adulterated  kerosene  oil.  There  is 
the  raising  of  inferior  beef  and  the  selling  of  it  for  the 
prime  article.  There  is  shoddy  cloth,  and  all  wool  goods 
whose  material  never  saw  the  sheep's  back.  And  there 
are  shoes  made  of  shoddy  leather,  which  fall  to  pieces  as 
soon  as  they  are  worn  in  the  rain.  And  all  this  is  done  to 
the  profit  of  the  Corporation.  It  is  not  infrequent  for  the 
manufacturers  of  some  first  class  article — made  and  kept 
first  class  until  the  confidence  of  the  public  is  estab- 
lished,— to  suddenly  adulterate  or  deteriorate  the  ma- 
terial of  which  the  article  is  made  and  thereby  reap 
hundreds  of  thousands  of  dollars  in  a  single  output,  or 
in  a  single  year. 

Thus,  by  fixing  the  prices  of  all  commodities,  with 
despotic  sway,  these  men  in  high  finance  are  able  to 
extort  a  tribute  from  the  people  every  time  that  they 
buy  any  article,  however  small.  And  they  thereby 
wield  a  power  of  spoliation  equal  if  not  greater  than 
that  of  the  Caesars  of  old.  And  for  the  people  there  is 
no  redress  so  long  as  the  present  system  shall  last. 

Fourth  Element  of  Its   Power 

The  Business  Corporation  holds  irresponsible  power 
over  all  sources  of  Investment;  it  influences  and,  in  a 
large  measure,  determines  with  despotic  sway,  to  its 
own  profit,  the  rise  and  fall  of  stocks,  the  price  to  be 
paid  for  stocks,  the  dividends  to  be  earned  by  capital 
and  holds  practically  all  the  savings  of  the  people  at 
its  mercy. 


32  EFFECTIVE    INDUSTRIAL    REFORM. 

Next  to  the  right  to  receive  a  just  compensation  for 
service  rendered,  and  obtain  commodities  at  a  fair 
price,  is  that  of  investing  one's  savings  where  they  shall 
be  safe  and  at  the  same  time  earn  a  just  and  equal  divi- 
dend to  the  investor.  And  this  right  should  be  most 
jealously  guarded  by  the  people. 

Now  I  maintain  that  our  country's  industries  are 
able  to  afford,  and  in  a  wise  providence  are  designed  to 
afford,  this  opportunity  to  invest  to  the  people.  And 
they  ought  to  afford  it  to  the  whole  people  alike.  All 
should  be  able  to  invest  their  savings  with  equal  safety, 
profit,  and  permanency.  Every  man's  dollar  invested 
in  these  industries  should  earn  as  large  a  dividend  as 
any  other  man's  dollar.  And  if  there  is  anything  in 
the  present  constitution  of  our  industrial  and  commer- 
cial world,  making  the  exercise  of  this  right  impossible, 
then  our  industrial  and  commercial  system  should  be 
changed  and  justice  should  be  done. 

Now  I  maintain  that  it  is  right  here  where  this  new 
Despotism  exercises  its  most  terrible  power. 

(1)  Unjust  Dividends. — For,  in  the  first  place,  the 
princes  of  high  finance  in  control  of  the  Corporation, 
hold  all  the  great  sources  of  Investment  in  their  exclu- 
sive grasp  and  reap  enormous  dividends  to  the  spoliation 
of  the  people. 

Take  Standard  Oil.  According  to  the  investigation 
in  1908,  the  original  capital  invested  in  that  industry 
was  only  about  $69,000,000.  And  yet  in  the  year 
1907  its  net  earnings  were— $80,000,000,  or,  116%*  on 
the  actual  capital  invested.     And  of  this,   it  actually 

*See  Report  of  Investigation  in  N.  Y.  Times,  Nov.  21,  1908. 


THE    NEW    DESPOTISM ITS    MIGHT.  33 

paid  to  the  investors, — $39,000,000  or  about  56%  on 
the  original  capital, — holding  the  rest  in  reserve. 

Here  then  is  a  vast  industry — belonging  by  moral 
right  to  the  whole  people  of  the  United  States,  whose 
energies  created  it  and 'now  support  it, — earning  a 
dividend  of  more  than  100%,  or  $100  yearly  on  every 
$100  invested;  and  yet  it  is  held  within  the  powerful 
grasp  of  a  few  irresponsible  men  who  hold  it  to  their 
own  exclusive  profit. 

Take  the  Beef  Trust.  A  careful  estimate  by  an 
expert  shows,  that  this  industry  must  realize  a  divi- 
dend of  at  least  43%*  and  that  on  stock  doubtlessly 
heavily  watered.  Suppose  that  it  realizes  50%  on  the 
actual  capital;   what  does  that  mean? 

It  means  that  another  great  industry  built  by  the 
energies  of  the  whole  people  and  supported  by  their 
trade  and  labor,  is  paying  a  net  dividend  of  $50,  at  the 
very  least,  on  every  $100  invested.  And  yet  this  industry 
like  Standard  Oil  is  held  in  the  grip  of  a  small  group 
of  men  who  hold  all  to  their  exclusive  aggrandisement. 

Take  the  Railroads  and  Express  companies. 

The  World's  Work  for  June  1908  quotes  Thomas  F. 
Ryan  as  saying, — and  saying  correctly,- — that  the  stock 
in  all  the  Railroads  built  prior  to  1885,  was  95%  water. 
That  means  that  the  original  investors  paid  only  about 
$5  per  share.  Now  when  we  bear  in  mind  that  these 
roads  are  quoted  at,  from  100  to  150,  and  at  this  quo- 
tation pay  a  dividend  from  4%  to  6%,  we  can  easily 
see  that  the  railroads  are  paying  the  enormous  divi- 
dend of   from   $80    to   $100    on   every   $100    originally 

*See  The  Greatest  Trust  in  the  World— Chas.  E.  Russell,  p.  162. 


34  EFFECTIVE    INDUSTRIAL    REFORM. 

invested  in  them.  And  yet  these  great  transportation 
systems,  whose  every  dollar  earned  comes  out  of  the 
labor  of  the  people, — these  vast  sources  of  profit,  are 
owned  and  held  in  the  grasp  of  a  few  irresponsible  men 
who  hold  all  to  their  exclusive  advantage. 

There  are  woolen  factories  and  other  industries  in 
New  England  which  are  known  to  earn  a  net  profit  on 
the  actual  capital  of  from  100%  to  200%  and  even 
more. 

Then  take  the  Banking  system.  A  banker  in  New 
England  informed  the  writer  of  this  book  that  the 
Chemical  bank  of  New  York  City  (1907),  paid  an  annual 
dividend  of  150%.  It  was  able  to  do  this  owing  to 
having,  in  addition  to  its  capital  of  $300,000,  a  surplus 
of  $400,000.  Another  bank  of  New  York,  having  paid 
large  annual  dividends  for  years,  paid,  in  1908,  an  as- 
tonishing surplus  dividend  of  1900%.  This  was  done 
by  paying  to  the  stock-holders  the  surplus  accumulated 
through   a  few  previous  years. 

Thus  we  perceive  that  the  large  industrial  and  com- 
mercial enterprises  of  this  country  are  paying  enormous 
dividends  on  the  actual  capital  invested.  And  this  is 
not  to  be  wondered  at.  Owing  to  the  multiplication  of 
vast  labor-saving  machinery, — the  cheapness  of  immi- 
grant labor,  the  new  methods  of  business,  the  correla- 
tion of  part  with  part,  and  the  integration  of  correlated 
industries  into  one  whole,— all  our  industrial  activities  are 
enormously  productive.  And  yet  all  these  vast  sources 
of  wealth  and  power,  are  held  within  the  exclusive 
grasp  and  to  the_exclusive  profit  of  the  few  irresponsible 
men  in  control. 


THE    NEW    DESPOTISM ITS    MIGHT.  35 

The  injustice  of  these  enormous  dividends  gouged 
out  of  the  earnings  of  the  people  is  especially  apparent 
when  we  compare  them  with  the  dividends  earned  by 
the  people.  For  what  is  the  percentage  paid  to  the 
people  on  their  investments?  If  the  people  place  their 
money  where  it  is  safe  in  a  good  Savings  bank  or  safe 
Industrial,  they  can  earn  generally  only  from  3%  to 
4%  or  from  $3  to  $4  on  each  one  hundred  invested, — 
which  is  only  about  one-tenth  or  one-twentieth  of  the 
dividend  earned  by  the  princes  of  high  finance  on  the 
same  amount. 

Is  this  Just? 

But  some  innocent  person  asks, — "Cannot  the  people 
invest  in  these  large  industries  also  if  they  choose? 
Are  not  stocks  always  for  sale?"  Yes,  these  stocks  are 
for  sale.  But  the  price  upon  them  is  placed  so  high  by  the 
princes  in  control  as  to  make  their  purchase  prohibitory 
or  so  as  to  destroy  all  great  profit  in  the  dividends. 

Standard  Oil  stock,  which  cost  the  investors  only 
about  $70  a  share,  could  not  be  bought  in  December 
1908  for  less  than  $660  a  share.  Railroad  stocks,  which 
cost  the  original  investors  only  $5  a  share  cannot  be 
bought  now  for  less  than  from  $100  to  $150  a  share. 
In  many  a  profitable  Electric  corporation  and  Woolen 
Mill,  stocks  cannot  be  bought  practically  at  any  price. 
It  is,  therefore,  a  fact  that  all  these  profitable  sources 
of  investment  are  held  in  the  exclusive  grasp  of  the 
irresponsible  men  in  control.  And  the  people  are 
simply  kept  out. 

It  is  sometimes  argued  by  people  who  are  either 
very  innocent  or  very  crafty,  that  the  enormous  risk, 


36  EFFECTIVE    INDUSTRIAL    REFORM. 

which  the  promoters  of  vast,  new  enterprises  under- 
take, makes  it  right  for  them  to  reap  an  enormous  profit 
when  the  enterprise  proves  to  be  successful.  But  this 
argument  is  utterly  unjust. 

For,  first,  it  is  we  may  say  never  the  promoter's 
money,  but  the  people's  money,  borrowed  by  the  pro- 
moter, or  received  through  the  sale  of  stock — which 
is  put  at  stake  in  these  new  enterprises. 

Secondly,  these  promoters  always  charge  and  take 
out  of  the  people's  money  an  enormous  commission  for 
their  services;  and  this  commission, — often  amounting 
to  $75,000  a  year,  is  taken  out  before  a  dollar  is  spent 
in  the  new  enterprise. 

Hence,  as  all  history  of  modern  business  shows, 
when  a  new  enterprise  fails,  it  is  the  people  who  loose 
everything,  while  the  business  promoter  comes  out  of 
the  affair  a  wealthy  man. 

When  Amalgamated  Copper,  in  1901,  failed  to  realize 
all  its  glowing  promises,  it  was  the  people  who  lost 
everything.  It  was  the  promoters  who  nevertheless 
made  $100,000,000.  When  the  Metropolitan  street  rail- 
way of  New  York  city  went  into  the  hands  of  the  re- 
ceivers in  1907,  it  was  the  thousands  of  innocent  in- 
vestors who  lost  all,  while  the  promoters  came  out  of 
it  multi-millionaires. 

(2) .  Grasp  and  Hold  all  Profitable  Sources  of  Invest- 
ment.— These  princes  of  high  finance  owing  to  the 
superior  knowledge  which  their  position  gives,  are  able 
to  learn,  and  acquire  possession  of  all  the  safe  and 
profitable  sources  of  investment,  leaving  the  poor  invest- 
ments to  the  people;    they  are  able  to  obtain  control 


Country  Club  in  the  Berkshires. 


PS 
P 

Z 

O 


THE    NEW    DESPOTISM ITS    MIGHT.  37 

of  all  the  new  and  profitable  industries ;  and  to  discover 
and  corral  all  the  new  resources  of  the  country. 

A  real  estate  corporation  can  easily  learn  by  virtue 
of  its  business  position  where  all  the  land  around  our 
cities  and  all  real  estate  within  them  will  increase  in 
value.  And  quietly  watching  its  opportunity  it  can  get 
all  these  sources  of  wealth  within  its  possession  and  hold 
them  until,  by  the  growth  of  the  city,  it  can  reap 
millions,— gouged  out  of  the  earnings  of  the  people. 

By  the  same  process  the  business  men  at  the  head 
of  the  large  concerns  are  able  to  learn  and  get  control 
of  all  the  opportunities  to  start  new  and  profitable 
industries,  in  electric  light,  street  railways,  and  man- 
factures.  By  the  same  process  they  are  able  to  corral 
and  have  already  largely  corralled  all  the  vast  resources 
of  this  country  in  Timber,  Coal,  Oil,  mines  of  Gold  and 
so  forth,  and  that  for  a  mere  song.  And  they  hold  all 
to  their  own  profit.  And  the  superior  knowledge  which 
these  men  possess  is  not  owing  to  the  fact  that  they 
are  in  any  wise  superior  to  the  rest  of  the  people,  or 
because  they  possess  superior  talent  in  any  way,  but 
solely  to  the  fact  that  the  position  which  they  hold  in 
the  accident  of  birth  or  business  position  gives  them  an 
enormous  advantage  over  all  the  rest. 

And  these  men  in  high  finance  are  able  to  obtain 
possession  of  nearly  every  invention  and  use  it  to  their 
own  profit.  It  is  the  custom  now  in  many  corporations 
to  pay  the  man  in  their  employ  who  reveals  especial 
ingenuity,  an  increase  of  wages  say  of  50  cents  a  day, 
with  the  agreement  that  all  the  fruits  of  his  inventive 
genius  shall  be  given  to  the  corporation  for  which  he 


38  EFFECTIVE    INDUSTRIAL    REFORM. 

works.  Thus,  these  men  in  control  obtain  possession 
of  new  inventions  for  a  mere  song,  which  yield  them 
often  hundreds  of  thousands  of  dollars.  The  inventor 
is  helpless;  for  every  industry  is  in  the  control  of 
the  corporation  and  he  must  sell  the  fruits  of  his  brain 
to  them  at  their  price.  Often  the  inventions  of  the  people 
are  used  to  drive  the  people  themselves  out  of  employ- 
ment and  to  bring  in  a  lower  class  of  labor  to  take 
their  place. 

Thus  all  good  investments,  all  resources,  all  new 
industries  and  all  inventions,  the  fruit  of  the  people's 
ingenuity,  are  ruthlessly  seized  by  the  irresponsible 
oligarchy  at  the  top,  and  held  to  their  exclusive  profit 
and  for  the  spoliation  of  the  people. 

(3).  Despoil  of  Both  Capital  and  Dividends. — These 
princes  of  high  finance  are  able,  by  virtue  of  their  high 
position  and  the  necessities  of  the  people,  to  win  the 
confidence  of  the  people  and  then  despoil  them  of 
both  capital  and  dividends  without  mercy. 

Widows  with  little  children,  laborers  who  by  severe 
denial  have  saved  a  meagre  pittance,  school  teachers, 
and  others,  feel  often  that  they  simply  must  obtain  a 
larger  dividend  on  their  savings  than  that  paid  by  the 
savings  bank.  Predaceous  gentlemen  in  the  business 
world  will  often  quietly  increase  the  earnings  of  the 
stock  in  an  apparently  safe  railroad  or  industrial.  Then 
when  the  confidence  of  the  people  is  established,  large 
amounts  of  stock  are  sold  to  them  at  an  advanced  price. 
But  no  sooner  is  the  people's  money  safe  in  the  pockets 
of  these  bandits  than  the  dividends  are  rapidly  decreased, 
the  value  of  stock  rapidly  decline  and  the  people,  fear- 


THE    NEW    DESPOTISM ITS    MIGHT.  39 

ing  that  their  whole  capital  is  going,  sell  back  their 
holdings  at  a  greatly  reduced  figure  to  the  very  gentle- 
men from  whom  they  purchased  the  stock.  The  rob- 
bers of  course  pocket  the  difference.  This  game  is  a 
constant  practise  in  the  business  world. 

A  new  business  is  often  started  or  an  old  one  re- 
organized* for  the  sole  purpose  of  robbing  the  people. 
The  new  business  is  largely  advertised.  Names  great 
in  the  business  world  are  cited  as  standing  sponsor  for 
the  new  deal.  The  capital  invested  is  quoted  far  above 
the  actual  amount.  Enormous  dividends  are  promised. 
Statements  are  made  fitted  to  deceive  the  very  elect. 
The  confidence  of  the  people  is  carefully  worked  up. 
Then  at  the  right  psychological  moment  the  stocks  are 
launched  onto  the  public.  The  people  thinking  here 
is  a  good  thing,  pour  the  savings  of  a  life-time  into  the 
new  enterprise.  But  no  sooner  is  the  money  safe  in 
the  pockets  of  the  bandit  promoters,  than  the  boom 
bursts.  Stocks  decline,  and  the  people  are  robbed.  In 
the  Amalgamated  copper  dealf  of  1901,  in  which  ap- 
peared men  in  Standard  Oil  and  other  large  industrials, 
the  people  were  gouged  out  of  over  $100,000,000. 

When  the  owners  of  some  old  but  hitherto  paying 
business  see  that  it  is  threatened  with  a  decline, — owing 
to  the  invention  of  a  new  machine,  throwing  all  power 
into  a  rival  concern,  or  to  the  loss  of  the  timber  supply 

*Reorganization  for  new  robberies  is  now  one  of  the  normal 
processes  of  business.  See  story  of  Metropolitan  system  in  Mc- 
Clure's,  from  Nov.  1907,  to  Jan.  1908; — in  particular  McClure's 
Jan.  1908,  p.  323. — "Great  American  Fortunes,"  Burton  J.  Hendrick. 

fSee  Current  Literature,  May  1904  or  The  Truth  About  Trusts,  by 
John  Moody. 


40  EFFECTIVE    INDUSTRIAL    REFORM. 

or  some  other  cause, — they  quietly  sell  the  stock  right 
and  left,  before  the  decline  can  be  known  to  the  people. 
And  when  they  have  thus  unloaded  onto  the  innocent 
public,  they  quickly  withdraw.  The  business  goes  to 
pieces.  And  with  the  capital  of  the  people  in '  their 
pockets,  the  robbers  enter  into  some  new  enterprise 
more  prosperous  than  before. 

Thus  there  is  no  justice  or  safety  for  the  people  in  the 
matter  of  investments  in  the  great  industrials  and  other 
utilities  of  the  country.  By  the  processes  just  named, 
widows,  school-teachers,  and  millions  of  laboring  people, 
are  fleeced  again  and  again  and  there  is  no  redress. 

(4).  Graft. — By  their  position  in  the  corporation 
they  are  able  to  devise  and  practice,  undetected,  stupen- 
dous schemes  of  graft.  This  is  done  by  payment  of 
commission,  by  making  corrupt  bargains  with  them- 
selves as  directors  of  different  corporations.  Mr.  Rus- 
sell in  The  Greatest  Trust  in  the  World  (p.  27)  intimates 
that  the  Red  Line,  and  Blue  Line  and  White  Line  are 
"  chromatic  devices  by  which  stockholders  are  defrauded 
by  railroad  officials,  and  private  hoards  increased." 
But  I  cannot  dwell  in  the  many  ways  of  graft  here.  The 
evil  is  notorious.* 

(5) .  Monopolize  All  Industries. — By  their  command 
of  all  the  great  markets  and  all  the  great  utilities,  the 
irresponsible  corporation  is  beginning  to  force  the  people 
out  of  every  industry  and  all  investments  that  still 
remain  to  them. 

*See  The  Greatest  Trust  in  the  World  —Chapter  V  and  XIII.— 
by  Chas.  E.  Russell.  See  also  The  Story  of  Life  Insurance  by  B. 
J.  Hendrick  in  a  series  of  Articles  in  McClure's,  beginning  Mav, 
1906. 


THE    NEW    DESPOTISM ITS    MIGHT.  41 

The  time  is  coming  when  all  our  village  stores,  even, 
will  be  sold  out  to  the  big  corporations  and  owned  by 
them  to  their  own  profit. 

The  time  is  coming  when  all  houses  in  city  and  vil- 
lage shall  be  owned  by  these  lords  of  finance;  and 
whosoever  rents — and  that  will  mean  all  the  people- 
will  be  obliged  to  rent  of  the  big  corporation  at 
its  price. 

The  time  is  coming  when  all  the  farm  lands  shall  be' 
owned  by  the  industrial  magnate.  Already  prices  are 
so  depressed  that  the  farmer  finds  it  more  profitable  to 
sell  his  farm  to  the  magnate  and  hire  out  to  him  on  a 
small  yearly  salary  and  house  rent,  than  to  farm  it 
independently. 

Thus,  if  the  present  system  continues,  without  doubt 
the  time  is  rapidly  coming  when  all  the  land,  all  the 
homes,  all  industries,  all  the  transportation  systems 
and  every  other  utility  and  source  of  wealth,  shall  be 
held  in  the  absolute  ownership  of  the  predaceous  Oli- 
garchy in  control.  And  the  people,  reduced  to  a  con- 
dition of  absolute  subjection  to  the  new  Imperialism, 
will  be  absolutely  helpless. 

(6).  Consolidating  Imperial  Control. — Finally,  those 
in  control  are  seizing  every  means  available  to  complete 
and  consolidate  this  work  of  imperial  power. 

They  have  laid  hold  of  the  government.  They 
systematically  corrupt  and  control  city  councils,  state 
legislatures  and  the  federal  government  in  their  in- 
terests. Defended  by  their  unprincipled  henchmen,  the 
corporation  lawyers,  they  violate  all  law  with  impunity. 
They  have  thus  created  for  themselves  a  power  greater 


42  EFFECTIVE  INDUSTRIAL  REFORM. 

than  all  civil  courts,  greater  than  the  government, 
greater  than  all  other  authority  whatsoever.  The  policy 
of  pensioning  the  employees  by  the  corporation,  is  but 
an  astute  device,  to  reduce  the  working  man  to  entire 
subjection  to  the  oligarchy  in  control.* 

And  they  are  determined  that  the  people  shall  not 
be  enlightened  as  to  the  terrible  peril  that  threatens 
them. 

The  irresponsible  corporation,  by  its  vast  patronage, 
exercises  a  controlling  influence,  over  many  of  the  news- 
papers in  the  country.  Very  few  dare  to  offend  this 
new  Imperial  Power.  It  exercises  a  dominating  in- 
fluence over  colleges,  schools  and  churches.  No  person 
unfriendly  to  it  can  hope  to  rise  to  any  position  of  in- 
fluence in  school  or  college  or  Church  or  State.  They 
have  their  henchmen  in  all  the  large  factories,  who 
loyally  aim  to  keep  the  people  in  subjection.  They 
aim  to  call  in  the  most  ignorant  people  of  the  old  world 
and  to  mingle  antagonistic  races  in  such  a  way  as  to 
make  combination  among  working  men  out  of  the 
question. 

Thus  every  effort  is  being  made  to  extend  and  con- 
solidate the  power  of  this  new  DESPOTISM  which  has 
fastened  itself  upon  us. 

*See  Chapter  XVII. 


"Shadowbrooke"  Formerly  the  Stokes  Villa. 
This  villa  overlooks  Stockbridge  Bowl,  a  beautiful  Berkshire 
lake.     This  picture  gives  no  conception  of  the  extensive  grounds, 
surrounding  the  house,  kept  in  repair  by  companies  of  men,  and 
made  as  beautiful  as  nature  and  art  can  achieve. 


Note. 
The  horses,  cattle  and  poultry  on  these  wealthy  estates  in  our 
country,  are  far  better  housed,  far  better  fed,  and  better  cared  for, 
when  sick,  than  the  wives  and  children  of  common  working  people 
and  farmers  in  these  United  States. 


CHAPTER  IV. 

THE  NEW  DESPOTISM— ITS   EVIL  FRUIT. 

The  evil  effects  of  this  abolition  of  moral  law  as  a 
governing  principle  from  the  business  world  and,  espec- 
ially, this  enthronement  of  despotic  power  are  most 
marked  and  fast  becoming  insufferable. 

In  the  first  place,  it  can  be  seen  from  the  preceeding 
pages  that  they  have  resulted  in  annihilating  all  jus- 
tice and  equality  of  opportunity  in  every  realm  of  the 
industrial  and  commercial  world  and  converted  our 
industrial  system  into  an  instrument  of  injustice  and 
oppression. 

In  order  to  have  justice  in  the  great  complex  organiza- 
tion of  human  society,  we  must  have  justice  and  equal 
opportunity  in  each  of  the  three  great  functions  of  our 
Industrial  and  Economic  system. 

First,  we  must  have  justice  and  equal  opportunity 
in  relation  to  the  vocations  of  life, — that  is,  we  must 
have  equal  opportunity  to  enter  into  every  vocation  or 
position  which  human  society  offers,  and  each  man 
must  receive  a  just  compensation — a  just  wage, — for 
the  work  which  he  performs.  And  he  should  have 
equal  opportunity  with  every  one  else  to  say  what  wages 
justice  demands. 

Second,  we  must  have  equal  opportunity  to  buy 
all  commodities  at  a  fair  price,  and  we  must  have 
ample  protection  from  adulteration  of  goods. 

And,  third,  we  must  have  equal  opportunity  to  in- 
vest our  savings  with  safety,  profit  and  permanency. 


44  EFFECTIVE    INDUSTRIAL    REFORM. 

In  the  establishment  of  justice  and  equal  opportun- 
ity in  these  three  great  economic  functions,  lies  the 
foundations  of  individual  and  national  wealth. 

I  am  aware  that  the  first  essential  factor  in  making 
a  living  and  acquiring  wealth  is  the  man  himself  and 
the  degree  of  skill  and  thrift  which  he  possesses.  And 
I  advocate  a  new  school  system  to  train  the  people 
vocationally.  But  I  maintain  that  there  is  another 
necessary  factor,  which  we  have  largely  overlooked, 
and  yet  which  is  equally  essential,  if  the  individual  is 
to  acquire  wealth  in  the  present  day,  namely, — a  just 
and  efficient  Industrial  and  Economic  system. 

For  no  man  to  day  can  make  a  living  or  acquire 
wealth  all  by  himself.  He  is  born  within  a  system, 
within  the  organization  of  human  society.  When  our 
country  was  young,  a  man  might,  indeed,  go  with  his 
wife  into  some  unoccupied  part  of  the  new  country 
and,  provided  he  could  protect  himself  against  the  In- 
dians, he  might  make  a  living  practically  all  by  himself. 
He  could  take  up  a  new  piece  of  land,  build  his  own 
house  and  become  his  own  employer  and  his  own  hired 
man.  He  could  supply  himself  with  all  commodities, 
and  invest  his  capital  wholly  in  his  own  property — in 
the  land  he  cultivated  and  the  cattle  he  raised.  In 
such  a  condition,  we  may  say  that  the  man's  ability 
to  make  a  living  and  acquire  wealth  was  wholly  depend- 
ent upon,  and  determined  by,  himself  alone.  Outside 
of  nature's  forces,  he  was  the  only  factor  concerned. 
But  today  another  factor  enters  in,  a  factor  of  equally 
dominating  power,  namely,  the  Industrial  aud  Commer- 
cial system  within  which  each  man  is  born. 


o 
« 
o 

H 

<! 

a 

w 

H 

► 
W 

5 

W 

o 

OS 

o 


n3 
o 

g 


Some  houses  of  the  foreigner  who  builds  our  railroads,  factories  and 
other  utilities. 


_Y  ^^       ~ 

/J 

am  I- 

To  compete  with  the  foreigner,  under  the  present  system,  the 
American  working  man  must  be  willing  to  live  in  homes  like  these; 
for  both  foreigner  and  American  are  at  the  mercy  of  the  prince 
of  finance. 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  45 

No  man  today  can  make  a  living  by  himself  or  be- 
come his  own  employer  or  his  own  hired  man.  The 
whole  earth  with  all  its  resources  has  been  seized  by, 
and  come  into  the  possession  of  human  society.  And 
human  society  has  become  organized  into  a  single  great 
plant  called  the  plant  of  civilization, — or  into  a  single 
great,  quasi  corporation  which  we  may  call  the  Corpora- 
tion of  Humanity. 

Hence,  today,  no  man  can  supply  himself  with  work, 
as  in  the  case  just  cited,  outside  of  the  corporation  of 
human  society.  He  must  obtain  it  as  the  gift  of  the 
great  corporation  or  system  in  which  he  is  born.  And 
he  must  become  the  employee  of  this  system.  The  head 
of  a  railroad  corporation  is  morally  no  more  his  own 
"boss"  or  employer  than  the  brakeman  who  works 
under  him.  Both  are  in  reality  the  hired  men  of  the 
great  corporation  of  human  society.  And  the  compen- 
sation which  each  receives  comes  not  from  himself  but 
out  of  the  aggregate  earnings  of  all  the  workers  within 
human  society. 

And  no  man  today,  in  reality,  buys  anything  of 
himself.  For  no  man  today  produces,  all  by  himself, 
the  things  that  he  uses.  Everything  we  use  is  the  pro- 
duct of  the  combined  labor  of  human  society.  The 
millionaire  coal-baron,  sitting  in  his  luxurious  home  on 
a  winter's  evening,  cries, — "  what  is  there  that  I  possess 
and  have  not  produced  myself?"  And  yet  as  a  matter 
of  fact,  nothing  that  he  possesses, — not  even  the  coal 
that  has  come  out  of  his  own  mine  and  now  burns  in 
bis  own  grate,  was  produced  by  himself.  And  if  he 
were  deprived  of  everything  that  has  been  created  by 


46  EFFECTIVE    INDUSTRIAL    REFORM. 

other  hands  than  his  own,  he  would  stand  in  a  desert 
as  naked  and  helpless  as  on  the  day  of  his  birth.  Thus 
it  is  true  that  everything  we  use  must  be  purchased  of 
this  great  corporation  called  Human  society,  and  we 
must  pay  the  price  which  this  corporation  or  some  one 
in  control  within  it,  dictates. 

The  same  law  holds  in  regard  to  Investments  and 
Dividends.  No  man  today  can  invest  his  savings,  to 
any  extent,  in  his  own  property.  His  savings,  if  in- 
vested at  all,  must  be  invested  in  this  great  plant  of 
Human  society — and  especially  in  the  great  Industries 
of  the  land, — in  its  Railroads,  Factories,  and  material 
resources.  And  the  proportion  of  the  aggregate  divi- 
dends which  each  man  receives  will  be  determined  by 
those  in  control  of  this  great  industrial  and  commercial 
plant. 

We  see,  therefore,  that  in  the  present  day  there  are 
two  essential  factors,  each  equally  important,  that  enter 
into  the  making  of  a  living  and  the  acquisition  of  indi- 
vidual wealth.  The  first  is  the  ability,  the  thrift  of  the 
man  himself,  and  the  second  is  the  character  of  the  great 
Industrial  and  Economic  System,  of  which  we  all  are 
a  part,  and  from  which  none  of  us  can  escape. 

Those,  therefore,  who  say  that  the  only  factor  in 
the  acquisition  of  individual  wealth,  is  individual  com- 
petency and  thrift  are  utterly  wrong.  We  must  have 
also  a  just  and  efficient  Industrial  and  Commercial  system. 
Indeed,  the  whole  Plant  of  Civilization  must  be  founded 
in  justice  and  efficiency.  And  I  care  not  how  skillful 
and  thrifty  a  people  may  be,  nor  how  well  trained  in 
industrial  schools,  if  their  industrial  system  is  inefficient, 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  47 

and,  especially,  if  it  is  unjust,  if  it  grants  special  privilege 
or  special  advantage  to  some  one  class  or  some  one 
vocation,  if  it  gives  one  class  the  power  to  exploit  the 
rest,  then  it  will  be  simply  impossible  for  the  rest  to 
rise  above  the  condition  of  severe  poverty.  They  may 
work  hard  and  toil  long  and  late,  but  their  severe  toil, 
their  very  skill  and  thrift,  will  go  only  to  the  advantage 
of  the  plunderers  at  the  top. 

Now  such  is  the  condition  of  our  Industrial  System 
today.  And,  the  first  evil  result  flowing  from  the  de- 
fects of  our  Industrial  system  is  that  justice  and  equality 
of  opportunity  have  been  absolutely  abolished  from 
every  function  of  that  system. 

There  is  no  justice  today  in  the  matter  of  wages 
and  opportunities  to  work  and  enter  business. 

It  is  reported  that  before  Mr.  Taft  went  into  politics, 
he  earned  or  at  least  received  an  income  of  $50,000  a 
year  from  the  profession  of  law.  Now,  that  is  a  pretty 
large  income  for  one  man  to  take  out  of  the  aggregate 
earnings  of  the  country.  But  how  much  do  we  pay  to 
the  teacher  in  our  public  schools  ?  From  $500  to  $5000 
a  year.  Now  it  is  a  fair  question  to  ask,  and  it  implies 
no  disrespect  to  Mr.  Taft  to  ask, — Were  Mr.  Taft's 
services  to  this  country  as  a  lawyer  worth  that  much 
more  than  the  services  of  the  teacher?  Or  did  he  get 
his  big  income  because  his  calling  gave  him  power 
to  compel  the  country  to  pay  it?  In  short,  does  this 
difference  in  income  arise  from  the  fact  that  the  lawyer's 
profession  gives  its  holder  the  power  to  gouge  while  the 
profession  of  the  teacher  does  not?  Does  justice  or 
something  else   determine  this  vast   difference  in   the 


48  EFFECTIVE    INDUSTRIAL    REFORM. 

compensation  received  by  different  men  for  the  service 

which  they  render? 

The  great  mass  of  so-called  common  laborers  are 

not   incompetent   neither    are   they   thriftless.       There 

are  some  among  them,  even  as  there  are  some  among 

those  at  the  top,  who  are  incompetent  and  wasteful. 

But  the  greater  number  of  common  working  men  are 

earnest,  hard-working  people.     And  they  .are  skilled  in 

their  particular  vocations.     They  love  to  take  care  of 

horses  and  cattle,  to  plow  the  land  and    make    things 

grow;   they  love  to  work  before  the  machines  that  make 

boots  and  shoes  and  other  utilities.     And  yet  while  the 

men  at  the  top  receive  a  salary  of  from  $50,000  to  $150 

000  a  year,  these  common  workers  receive  only  from 

$1.50  to  $2  a  day;    and  their  wives  must  forsake  their 

homes  and  their  little  children,  for  the  factory,  or  their 

wealthy  neighbor's  wash-tubs,  or  to  do  a  man's  work  on 

the  farm,  in  order  to  eke  out  a  miserable  living.* 

*The  census  reports  of  1900  gives  the  average  weekly  wage  of 
men,  women  and  children  as  follows: — 
Textile  Trades,  661,451  workers:     Men,  $7.63  per  week;   Women, 

$5.18  per  week;  Children,  $2.15  per  week. 
Iron  Workers  Trades,  222,607  workers:     Men,  $10.46. 
Boot  and  Shoe  Trades,  142,922  workers:  Men,  $9.11;  Women,  $6.13; 

Children,  $3.40. 
Men's  Clothing  Trades,  120,950  Workers:     Men,  $10.90;  Women, 

$4.88;  Children,  $2.61. 
See  The  Church  and  Modern  Life,  p.  142.. 143,  by  Washington 
Gladden,  1908. 

Read  also  the  valuable  report  by  Prof.  Robert  Coil  Chapin  of 
Beloit  College  on  "  The  Standard  of  Living  among  Working  Men's 
Families  in  New  York  City.  '  The  general  conclusion  is  that  wages 
are  too  low  for  families  to  live  in  comfort.  This  conclusion  is  con- 
firmed by  reports  of  conditions  of  wage-earners  in  Pittsburg  pre- 
pared by  several  experts,  published  in  the  January,  February  and 
March  (1909)  numbers  of  The  Survey.  It  shows  that  a  family  in- 
come of  two  dollars  per  day  is  miserably  insufficient  for  the  essentials 
of  American  living  while  present  prices  are  maintained. 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  49 

Now  it  requires  no  microscopic  analysis  nor  keeness 
of  judgment  to  see  that  this  vast  inequality  is  most  un- 
just; or  to  see  that  as  long  as  the  present  system 
endures  there  is  no  hope  for  the  lower  ranks  of  labor. 
No  matter  how  skilled  or  thrifty  they  may  become, 
they  can  never  receive  the  large  bounties  of  life  nor 
lay  up  anything  for  old  age. 

And  this  stupendous  injustice  and  wrong  arises  from 
the  two  sources  which  I  have  described  in  the  preceding 
Chapters.  First,  we  have  repudiated  justice  as  a 
governing  principle  or  standard  from  our  whole  indus- 
trial and  commercial  life;  and,  second,  the  whole  plant  of 
civilization  has  been  seized  by  a  small  financial  oli- 
garchy* who  control  all  to  their  own  profit.  Justice 
cannot  exist  under  such  conditions. 

There  is,  therefore,  no  such  thing  as  justice  in  the  rel- 
ative salaries  or  compensation  received  by  the  different 
workers  of  hand  and  brain  in  the  United  States.  There 
is  everywhere  injustice  and  spoliation.  And  this  is  true, 
both  of  the  immigrant  who  has  just  come  and  the  older 
worker  in  the  land.     Both  are  despoiled  and  oppressed. 

The  same  indictment  can  be  brought  against  prices 
and  the  quality  of  the  goods  paid  for. 

Owing  to  the  fact  that  we  have  no  method  of  fixing 
prices,  except  the  relative  individual  power  to  charge 
and  demand  from  others  what  he  will,  and  since  all  our 
great  industries  have  come  into  the  possession  of  des- 
potic power,  as  I  have  shown,  the  fixing  of  prices  has 
been  simply  converted  into  a  conscienceless  agent  of 
extortion, — or  the  means  of  exacting  tribute.  The  price 
of  Coal,  Oil,  Clothing,  Rents,  are  simply  extortionate. 

*See  "Our  Financial  Oligarchy,"  by    Sereno  S.  Pratt,  World's 
Work,  p.  6704-6714. 


50  EFFECTIVE    INDUSTRIAL    REFORM. 

And  were  there  no  other  injustice  but  this  in  relation 
to  prices,  there  would  still  be  no  hope  for  the  lower 
half  of  the  race. 

Finally,  there  is  no  justice  in  relation  to  Investments, 
the  earning  of  Dividends  and  the  acquisition  of  wealth. 

Three  things  are  desired  in  relation  to  Investments, 
— safety,  profit,  and  permanency.  But  there  is  no 
such  thing  as  justice  in  any  one  of  these  directions. 
Take  the  element  of  safety.  The  exploiters  at  the 
top  can  invest  their  money  and  keep  it  invested  with 
almost  perfect  safety,  for  it  never  passes  out  from  their 
control.  But  the  common  people's  money  is  never 
safe  because  the  moment  that  they  invest  it,  it  passes 
completely  into  other  hands — into  the  hands  of  the 
irresponsible  oligarchy  whose  deliberate  purpose-  it  is 
to  plunder  the  people.  The  great  mass  of  the  people 
are  simply  shut  out  from  investing  in  the  great  industries 
of  the  country  for  the  simple  reason  that  to  invest  means 
to  imperil  if  not  lose  one-half  or  one-third  and  perhaps 
all  their  capital.  And  along  with  this,  is  constant 
anxiety  and  suffering. 

Then  take  the  element  of  profit.  If  the  mass  of  the 
people  can  earn  a  small  dividend  of  3X%  or  4%  on 
their  money  in  a  Savings  Bank,  they  do  well.  But  the 
princes  of  finance  reap,  as  I  have  shown,  from  50%  to 
100%  and  even  200%  on  their  investments.  Is  this 
just  ? 

Then  take  the  element  of  permanency.  The  pro- 
moter's money  is  in  for  life,  if  he  desires;  and  he  hands 
his  investments  down  to  his  children  and  children's 
children.     These  princes  of  finance  thus  hand  down  a 


(Courtesy  of  Pittsfield  Journal.) 
Children  in  Day  Nursery  while  the  mothers  are  at  work. — Pittsfield,  Mass. 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  51 

perpetual  income  of  millions  to  their  children  so  that 
they  live  all  their  lives  without  one  thought  of  work 
or  economy.  They  are  given  a  perpetual  income  of 
thousands  upon  thousands  to  spend  in  absolute,  irrespon- 
sible luxury  and  idleness.  But  the  people's  savings  can 
be  invested  only  for  a  limited  time — for  three,  or  five, 
or  ten  years  and,  then,  there  is  all  the  anxiety  of  re- 
investing it ;  and  often  several  hundreds  and  even  thous- 
ands are  lost  in  the  process.  Indeed,  as  I  have  shown, 
the  princes  of  finance  are  waiting  to  despoil  the  people 
of  both  capital  and  dividends  at  every  opportunity. 

Thus  it  is  a  fact  that  there  is  no  justice  and  no 
equality  of  opportunity  in  any  part  of  the  industrial 
and  commercial  world.  Justice  as  a  determining  factor 
has  been  completely  dethroned.  Despotic  power  holds 
the  scepter  of  control.  The  very  law  of  competition, 
which  our  fathers  extolled  as  the  instrument  of  justice, 
has  been  seized  by  despotic  power  and  converted  into 
the  most  powerful  agent  of  spoliation  and  oppression. 
In  the  divine  Providence,  the  purpose  of  industrial 
and  commercial  organization  is  to  greatly  increase  the 
facility  and  the  power  of  individuals  to  make  a  living 
and  acquire  wealth.  And  the  object  of  this  is  to  increase 
the  happiness  of  the  whole  people,  and  free  them  from 
the  slavery  of  toil  that  their  minds  may  become  occupied 
with  higher  achievements.  But  this  whole  beneficent 
purpose  of  Providence  is  thwarted  by  our  defective 
system,  which  has  been  converted,  instead,  into  a 
huge  engine  of  injustice  and  oppression;  and  for  the 
people  there  is  no  redress  so  long  as  the  present  system 
endures. 


52  EFFECTIVE    INDUSTRIAL    REFORM. 

2. 

Second  Evil  Fruit  of  this  New  Despotic  Power — the 
Unjust  Concentration  of  Wealth. — In  the  second  place, 
this  new  despotic  power  has  resulted,  as  was  inevitable, 
in  making  the  few  enormously  rich  and  powerful  and  the 
many  desperately  poor  and  helpless.  It  has  unjustly 
concentrated  the  wealth  and  power  of  the  country  into 
a  few  hands. 

Mr.  Cleveland  Moffet,  approved  by  R.  G.  Dunn  and 
Co.  has  given  a  list  of  some  of  America's  great  fortunes. 
This  list  should  be  carefully  studied  and  its  significance 
carefully  weighed.  While  studying  it,  it  should  be  borne 
in  mind  that  the  wealth  of  this  country  is  not  the  product 
of  the  energies  of  any  one  man,  nor  of  any  one  brain. 
The  wealth  of  this  country  is  the  product  of  the  com- 
bined energies  of  the  whole  people.  One  man  works  in 
his  little  place  and  another  in  his ;  but  we  are  all  work- 
ing together.  One  man  works  chiefly  with  his  hands, 
another  works  chiefly  with  his  brains ;  one  man  concen- 
trates his  energies  in  a  single  department,  another 
superintends  many  departments;  but  we  form  all  to- 
gether a  single  vast  industrial  and  commercial  organiza- 
tion for  the  most  efficient  production  and  the  just  dis- 
tribution of  wealth. 

It  is  true  that  one  man's  work  is  worth  more  than 
another's.  There  are  expert  workmen  and  good  work- 
men and  poor  workmen.  All  therefore  should  not 
receive  the  same  reward.  But  however  expert  a  man 
may  be,  however  high  his  position,  he  should  not, 
thereby,  be  justified  in  seizing  possession  of  the 
whole  wealth  of  the  country,  nor   should   he   reap .  the 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  53 

product   of  the   combined  labor  of   the   whole    people. 

What  the  world  demands  to-day  is  Justice  in  the 
distribution  of  the  fruits  of  our  combined  toil. 

Now  in  the  light  of  this  demand  the  following  table 
implies  a  condition  of  injustice  and  peril  which  is 
appalling. 

Mr.   Moffet's  list,  approved  by  R.   G.   Dunn  &  Co. 

1.  Ten  richest  men  in  the  U.  S.   (1907) 

John  D.  Rockefeller $1,000,000,000 

Andrew  Carnegie 300,000,000 

Marshall  Field  (died  in  1906) 150,000,000 

W.  K.  Vanderbilt 120,000,000 

John  Jacob  Astor 100,000,000 

J.  P.  Morgan 100,000,000 

Russell  Sage  (died  in  1906) 60,000,000 

J.  J.  Hill 60,000,000 

William  A.  Clark 50,000,000 

William  Rockefeller 50,000,000 

2.  Number  of  Fortunes. 

10  aggregating 2,000,000,000 

490  "  3,000,000,000 

4500  "  10,000,000,000 

5000  $15,000,000,000 

This  list  is  ominous. 

It  shows  that  one  man — John  D.  Rockefeller  owns 
one  one-hundredth  part  of  the  aggregate  wealth  of 
this  country.  In  other  words,  if  there  were  only  one 
hundred  men  in  the  United  States,  this  man  would 
possess  only  his  normal  share.     But  America  possesses 


54  EFFECTIVE    INDUSTRIAL    REFORM. 

one-fourth  of  the  wealth  of  the  earth.  It  follows, 
therefore,  that  if  there  were  only  four  hundred  men  in 
the  world,  John  D.  Rockefeller  would  have  only  his  share. 

It  shows  that  5000  men'  own  one-seventh  of  all  the 
wealth  of  this  country.  In  other  words,  if  there  were 
but  35,000  men  in  the  United  States,  these  5000  men 
would  own  only  their  normal  portion. 

Then  think  of  the  enormous  incomes  which  these 
men  must  receive.  If  John  D.  Rockefeller  receives  only 
3%  on  his  wealth,  his  income  is  $30,000,000  a  year, 
or — counting  300  days  in  the  year, — $10,000  a  day. 
Does  he  earn  that  amount?  60,000  men  have  to  be 
taxed  $500  a  year  to  pay  him  his  income. 

At  3%,  the  income  of  these  5000  wealthiest  men  in 
the  United  States  (as  given  in  the  list),  amounts  to  the 
enormous  total  of  $450,000,000.  900,000  men  have  to 
be  taxed  $500  apiece  to  pay  this  income. 

And  these  enormous  incomes  are  not  turned  back 
into  the  industries  of  this  country  to  be  usefully  em- 
ployed in  the  welfare  of  the  people.  It  is  largely  wasted 
in  most  extravagant  living,  including  the  building  of 
costly  yachts,  automobiles,  and  marble  palaces.*  The 
extravagance  of  these  wealthy  classes  outrivals  that  of 
the  king  and  nobility  of  France  in  the  days  of  Louis 
XIV  which  brought  France  into  abject  poverty  and 
brought  on  the  French  revolution.  It  outrivals  the 
wasteful  expenditures  of  the  aristocracy  of  ancient 
Rome  which  ruined  the  Roman  empire  and  civilization. 

*See  "The  Woman  of  Millions — How  she  spends  her  money," 
in  Woman's  Home  Companion,  March  1907. 

See  also  "Burning  Money,"  by  I.  D.  Marshall  in  The  Boston 
Herald  (Sunday)  July  23,  1905. 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  55 

And  the  large  part  of  this  wealth  is  not  spent  even 
in  this  country.  The  families  of  these  wealthy  men 
migrate  to  Europe,  their  daughters  marry  impecunious 
European  noblemen  and  their  enormous  incomes  are  spent 
not  in  America  but  across  the  sea,  and  often  in  luxuri- 
ous and  immoral  ways  that  are  a  disgrace  to  civilization. 

When  in  1908  an  American  heiress  married  a  cer- 
tain European  nobleman,  her  fortune  was  reported  to 
be  $20,000,000.  At  3%,  her  yearly  income  on  this 
fortune  is  $600,000.  1,200  men  have  to  be  taxed  $500 
a  year  to  pay  it.  And  this  whole  income  probably  has 
to  be  sent  across  the  sea  to  be  spent  in  Europe. 

When  in  1906,  another  American  heiress  married  a 
member  of  the  English  aristocracy,  in  London,  her 
father  settled  on  her  $150,000  a  year  as  "pin-money." 
300  men  have  to  be  taxed  $500  a  year  to  supply  this  fair 
American  with  spending  money.  And  yet  it  all  goes 
to  England  across  the  sea. 

This  aggregation  of  wealth  in  the  hands  of  the 
few  means  the  plunging  of  the  people  into  abject  pov- 
erty and  suffering.  Dr.  Charles  B.  Spahr  writing  in 
1892-4,  divided  the  population  of  America  into  four 
classes, — the  wealthy,  the  well-to-do,  the  middle  class, 
and  the  poorer  class.  And  he  showed  that  while  the 
wealthy  class  embraced  only  125,000  families  or  one 
per  cent  of  the  entire  population,  yet  they  owned  more 
than  one-half  of  the  aggregate  wealth  of  the  country, 
and  that  their  average  wealth  was  $264,000  per  family. 

The  well-to-do  classes  embraced  1,375,000  families 
or  one-tenth  of  the  population,  and  they  possessed 
about  $16,000  to  a  family. 


56  EFFECTIVE    INDUSTRIAL    REFORM. 

The  middle  classes  embraced  5,500,000  families  or 
nearly  one-half  of  the  population,  and  averaged  about 
$1500  to  a  family. 

The  poorer  classes  numbered  5,500,000  families  or 
nearly  all  of  the  lower  half  of  the  population  and  aver- 
aged only  $150  to  a  family. 

These  figures  are  ominous. 

Charles  B.  Spahr  wrote  in  1892-4.  Conditions  are 
worse  to-day.  The  aggregate  wealth  of  the  country 
then  was  estimated  at  $65,000,000,000.  In  1908,  it 
was  estimated  at  the  astounding  aggregate  of  $118,000,- 
000,000.  And  yet  it  is  certain  that  the  average  wealth 
of  the  poorer  classes  is  no  greater,  if  it  is  not  even  less, 
than  in  1904.-  All  this  marvelous  increase  in  wealth 
has  gone  to  enrich  the  exploiting  classes. 

As  we  study  these  figures  it  is  not  hard  to  see  where 
the  earnings  of  American  industries  largely  go.  Neither 
is  it  hard  to  see  why  the  wages  of  working  men  are  so 
small — nor  why  one-third  of  the  American  people  live 
in  hardship  and  poverty — nor  why  some  1,250,000  chil- 
dren must  go  under-fed  and  under-clothed, — nor  why 
the  public  school  teachers  in  all  our  cities  and  in  the 
country  can  be  paid  for  their  valuable  and  most  trying 
services  only  barely  sufficient  to  pay  for  their  board 
and  clothes, — nor  why  the  work  of  our  churches  at  home 
and  in  the  mission  field  languishes  for  lack  of  support. 

During  the  strike  of  1904,  the  papers  published  a 
copy  of  the  photographs  of  some  of  the  daughters  and 
coming  wives  of  the  laboring  classes  in  the  weaving 
factories  of  Lowell.  It  was  my  intention  to  republish 
them  in  this  book.     No  one  could  see  these  pictures  or 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  57 

be  acquainted  with  the  girls  themselves  and  not  say 
that  they  were  just  as  womanly  and  noble  in  mind  and 
heart  as  any  of  the  daughters  of  the  millionaires, — no 
one  could  know  them  and  not  say  that  they  were 
just  as  worthy  of  possessing  leisure  for  recreation  and 
culture,  and  that  they  were  just  as  worthy  of  the  com- 
forts and  advantages  of  wealth  as  the  daughters  and 
wives  of  the  rich. 

And  yet  just  because  such  girls  are  the  daughters 
of  the  laboring  class,  they  are  compelled  before  mar- 
riage to  work  six  days  in  the  week  at  the  loom  on  a 
mere  pittance  of  six  or  seven  dollars  a  week.  They 
have  no  time  for  healthful  outdoor  recreation.  And 
when  they  become  wives  and  mothers  they  will  be  com- 
pelled to  do  their  own  work.  They  will  have  to  labor 
hard  and  struggle  hard  on  limited  means  every  day. 
They  will  never  know  the  pleasure  of  listening  to  de- 
lightful music,  of  witnessing  the  exhibition  of  our  nob- 
lest dramas.  Constant  toil  will  be  their  portion.  By 
the  time  that  they  are  forty  the  bloom  will  be  off  the 
cheek  and  they  will  be  hopeless  so  far  as  their  ever 
being  anything  else  than  drudges  all  the  days  of  their 
life.  Many  will  be  obliged  to  continue  to  work  in  the 
factory  after  becoming  wives  and  mothers.  And  they 
will  have  to  endure  all  this  in  order  that  the  daugh- 
ters and  wives  and  often  degenerate  sons  of  the  million- 
aire may  live  in  idleness  and  luxury,  spending  often  in  a 
single  day  more  than  a  working  girl  can  earn  in  a 
life  of  toil. 

Compare  for  a  moment  the  homes  of  the  working 
man  with  the  palatial  residence  of  the  millionaire  on 


58  EFFECTIVE    INDUSTRIAL    REFORM. 

Jekyl  Island  off  the  coast  of  Georgia,  his  winter  home. 

This  island  is  owned  by  the  Millionaire's  Club,  of 
which,  as  its  name  indicates,  only  a  millionaire  can  be- 
come a  member. 

It  costs  $15,000  to  be  admitted  into  this  Club,  and 
$15,000  more  to  buy  a  lot  on  the  Island. 

Three  hundred  men  are  employed  the  year  round 
caring  for  the  Island  and  keeping  it  in  condition  for 
the  residence  of  these  millionaires  for  three  months  in 
the  year.  During  the  season  of  residence,  there  are 
two  thousand  servants  ministering  to  the  wants  and 
luxuries  of  these  few  millionaires  and  their  families. 

They  have  a  Club-house  in  which  they  can  take 
dinner  together,  and  in  which  are  the  recreation  halls 
and  parlors.  They  go  there  "to  rest,"  and  spend  the  time 
idling  and  sleeping  through  the  day  and  in  visiting  and 
playing  cards  and  bowling  in  the  evenings.  The  whole 
Island  is  brought  under  the  hands  of  the  landscapers 
and  made  as  beautiful  as  nature  and  art  can  render  it. 

Now,  is  it  right  that  one  portion  of  society  should 
enjoy  all  these  extravagant  luxuries,  while  the  wives 
and  daughters  of  another  part,  who  are  just  as  womanly 
and  render  to  society  a  far  greater  service,  are  acquainted 
only  with  hardship,  privation  and  hopeless  toil? 

It  is  not  infrequent  among  the  wealthy  to  use  $4,000 
in  a  single  evening's  entertainment  or  ball,  and  even 
$45,000*  has  been  spent  in  a  single  dinner  and  enter- 
tainment by  a  society  woman. 

♦"Mrs.  Cornelius  Vanderbilt  spent  $45,000  for  five  hours  of 
pleasure — and  Newport  did  not  think  it  so  remarkable  either." — 
See  "The  Woman  of  Millions — How  she  spends  her  money" — in 
Woman's  Home  Companion,  March  1907. 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  59 

In  the  month  of  April,  1906,  in  a  sermon  preached 
in  the  Church  of  the  Epiphany,  New  York,  Dr.  Peters  ar- 
raigned the  fairer  sex  for  their  wasteful  extravagance, 
saying  that  a  leading  dressmaker  "declares  that  we  have 
one  hundred  women  who  spend  every  year  on  dress 
$30,000  each,  one  thousand  who  spend  $15,000  each, 
and  five  thousand  who  spend  $5,000  each — 6,100  women, 
spending  an  aggregate  of  $43,000,000  a  year  on  dress 
alone."* 

"And  this,"  he  added,  "is  in  a  city  where  upward 
of  twenty  per  cent  of  the  population  are  at  some  time 
during  the  year  dependent  upon  charity  for  their  daily 
bread,  where  one  out  of  every  ten  is  buried  in  the  Potter's 
Field,  where  more  than  twenty  thousand  evictions  occur 
each  year  in  the  Borough  of  Manhattan  alone,  and  where 
seventy  thousand  children  go  to  school  every  morning 
inadequately  fed." 

Now  when  we  reflect  that  society  is  a  great  organ- 
ized whole,  all  mutually  inter-dependent,  and  remem- 
ber that  one  part  cannot  enjoy  all  these  luxuries  except 
at  the  cost  of  the  poverty  and  destitution  of  the  rest, 
we  are  impressed  with  the  great  injustice  of  our  present 
industrial  system  which  makes  such  inequalities  in  the 
distribution  of  the  products  of  our  common  toil  possible. 

All  this  Wealth  Wasted, — And  here  should  be  made 
an  important  observation.  It  is  frequently  affirmed 
that    the    money   which  the    opulent   spend   in   costly 

♦"Miss  Guila  Morosini,  daughter  of  former  partner  of  Jay 
Gould,  confesses  that  she  spends  $200,000  a  year  on  clothes  alone." 
— See  "The  Woman  of  Millions — How  she  spends  her  money," — in 
Woman's  Home  Companion,"  March  1907. 


60  EFFECTIVE    INDUSTRIAL    REFORM. 

dinners,  entertainments  and  other  vanities  is  not  wast- 
ed because  it  goes  to  the  poor  for  work. 

No  greater  fallacy  was  ever  uttered.  All  this  money- 
is  wasted  and  wasted  irretrievably. 

To  prove  this  let  us  assume  that  two  men  have  each 
$50,000  to  spend  in  giving  work  to  100  men  out  of 
employment.  Both  agree  that  this  money  should  not 
be  given  outright  but  as  a  reward  for  work. 

The  first  man  accordingly  orders  the  men  to  carry 
a  large  pile  of  bricks  across  the  street  and  back  again; 
and  he  keeps  them  at  this  useless  work  all  the  summer. 
And  at  the  end  of  the  summer  he  pays  them  each  $500 
for  his  services.  Now  what  has  that  man  actually  done 
with  his  $50,000?  He  has,  it  is  true,  kept  the  men 
in  work;  he  has  paid  them  $500  apiece  or  $50,000  in 
all.  But  their  labor  has  been  absolutely  thrown  away. 
It  has  produced  nothing  useful  to  them  or  anyone   else. 

But  let  us  look  at  the  other  man.  He  engages,  like 
the  first,  100  men  in  labor.  But  he  sets  them  to  work 
constructing  dwelling  houses  for  laboring  men  and  says, 
— "all  that  you  create  this  summer  by  your  labor  shall 
be  yours."  So  they  go  to  work.  But  when  the  Sum- 
mer is  done,  what  have  they  produced  by  their  labor? 
Or  rather  what  has  the  second  benefactor  produced  by 
the  expenditure  of  his  $50,000?  Like  the  first  man, 
he  has  kept  100  men  in  work  and  paid  them  $50,000. 
But  in  addition  to  this,  these  men  have  created  ten 
beautiful  cottages  each  worth  $5000  in  which  as  many 
families  can  live  in  comfort,  for  generations  to  come. 

The  first  benefactor  therefore,  we  maintain,  has  flung 
his  money  away.     He  has  it  is  true  furnished  100  men 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  61 

with  work  for  the  summer.  But  he  has  engaged  them 
in  useless  labor.  He  has  paid  them  $50,000  but  their 
work — $50,000  worth  of  work, — has  been  absolutely- 
wasted  as  if  it  had  been  burnt  up  in  the  fire. 

So  also  when  a  society  woman  spends  $50,000  in  an 
evening's  entertainment  of  five  hours,  she  cannot  claim 
that  the  money  is  not  wasted  because  forsooth  it  is 
paid  to  the  poor  for  labor.  For  it  is  paid  to  the  poor 
for  useless  labor.  She  has  supplied,  it  is  true,  many 
hundreds  of  people  with  work  for  several  months.  But 
all  their  labor  has  been  wasted  in  gratifying  the  vanity 
of  three  or  four  hundred  idle  people,  for  five  or  six  hours. 
Their  labor  has  been  thrown  away  as  if  burnt  in  the 
fire. 

Ever  since  the  building  of  the  pyramids  in  ancient 
Egypt  down  to  the  present  time,  despotic  power  has 
been  seized  with  the  mania  of  building  costly  palaces 
and  of  keeping  up  vast  estates  whose  chief  end  is  to 
minister  to  the  pride  and  vanity  of  their  possessors.  All 
know  how,  in  the  time  of  Louis  XIV,  all  the  nobility 
were  seized  with  the  ambition  to  build  the  most  costly 
structures,  and  how  Louis  the  king  sought  to  excel  them 
all.  And  it  is  a  historical  fact  that  while  billions  of 
dollars  were  thus  spent  in  erecting  the  most  costly 
palaces  and  in  maintaining  the  most  costly  estates 
which  were  of  use  to  nobody  except  to  minister  to  the 
pride  of  the  aristocracy,  the  people  were  living  in 
wretched  hovels,  and  mothers,  dead  from  starvation, 
were  seen  lying  by  the  roadside  with  their  emaciated 
infants  still  tugging  at  the  breast  which  could  no  longer 
give  them  nourishment. 


62  EFFECTIVE    INDUSTRIAL    REFORM. 

Do  we  not  see  the  same  thing  taking  place  in  this 
country  to-day?  Is  not  the  labor  of  millions  of  men 
to-day  wasted  in  building  costly  palatial  residences  in 
which  their  owners  dwell  only  two  or  three  months 
and  often  not  at  all  during  the  year, — wasted  in  caring 
for  vast  estates  and  keeping  alive  blooded  horses 
blooded  stock  and  fancy  poultry  which  are  of  no  use 
except  to  minister  to  the  pride  of  their  possessors,  while 
vast  multitudes  of  the  people  must  go  inadequately 
housed,  inadequately  fed  and  inadequately  clothed? 

I  maintain  therefore  that  the  assertion  is  true  that 
the  money  spent  in  giving  work  to  men  who  build  these 
costly  structures  and  maintain  these  vast  estates  and 
in  ministering  to  the  entertainment  of  the  rich,  is  wasted. 
The  money  is  thrown  away.  It  is  spent  in  ministering 
to  pride  and  vanity  when  it  ought  to  go  to  build 
homes  for  the  people  and  in  producing  for  them  bread 
and  clothing  and  other  necessaries  of  life. 

3. 

Third  Evil  Fruit  of  this  New  Despotic  Power — Des- 
troys Efficiency  of  Production. — Our  present  system  like 
every  other  despotic  power,  is  destructive  of  efficiency 
in  Production.  Our  boast  that,  whatever  be  the  defects 
of  the  present  system,  it  promotes  the  greatest  efficien- 
cy, is  untrue. 

For  first,  in  order  to  secure  the  most  efficient  produc- 
tion, it  is  evident  that  there  should  exist  the  heartiest 
peace  and  good-will  between  capital  and  labor.  But  our 
present  system  has  thrown  capital  and  labor  into  deadly 
antagonism   resulting   not   only  in   deadly   strikes   and 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  63 

lock-outs,  but  in  driving  labor  to  handicap  itself  with 
labor  rules  and  to  handicap  capital  also.  It  is  esti- 
mated by  good  authority  that  the  city  of  Chicago  lost 
$80,000,000  in  a  single  year  through  strikes  and  threats 
to  strike. 

Second.  In  order  to  the  most  efficient  production 
the  working  man  needs  the  inspiration  of  a  personal 
interest  in  his  work  so  that  he  will  do  his  best. 

Said  Homer  three  thousand  years  ago, — 

"Jove  fixed  it  certain,  the  self-same  day, 
Makes  man  a  slave  takes  half  his  worth  away." 

Now  it  is  a  fact  that  the  workman  to-day, — often 
ignorant  and  depressed  by  previous  generations  of 
oppression  and  having  no  personal  interest  in  the  busi- 
ness is  little  better  or  more  efficient  than  the  slave. 
He  shirks  when  the  back  of  the  boss  is  turned,  he  wastes 
material  as  well  as  time.  All  inventive  genius  is  dead 
and  the  man  cannot  do  his  best. 

Third.  In  order  to  the  greatest  efficiency,  it  is  all 
important  that  the  most  efficient  men  be  selected  to 
serve  as  directors  and  managers  of  each  industry. 

It  is  coming  to  be  more  and  more  a  pronounced 
fact  that  the  present  system  with  its  favoritism  does 
not  elect  the  best  men  to  the  highest  positions  in  the 
industrial  and  business  world.  Fathers  desire  their 
sons  to  succeed  them  in  business;  but  the  sons,  fre- 
quently spoiled  by  the  very  wealth  of  the  fathers,  are 
utterly  incapable.  Many  a  good  thriving  business  on 
which  the  welfare  of  a  whole  community  depends  is 
wrecked,  simply  because  its  management  went  by  in- 


64  EFFECTIVE    INDUSTRIAL    REFORM. 

heritance  to  a  rich  but  incompetent  fool.  Then  it  not 
infrequently  happens  that  a  bold  bad  man  succeeds  by 
his  wealth  to  vault  into  control.  And  his  whole  en- 
deavor is  first  to  loot  the  business  and  then  sell  the  sal- 
vage for  more  than  the  sound  business  is  worth.  Again 
a  disunited  and  warring  management  comes  into  power. 
And  there  is  a  most  bitter  rivalry.  There  is  waste  and 
neglect  and  disorder.  All  of  which  could  be  prevented 
if  the  people  had  the  electing  of  the  directors. 

It  is  a  fact  that  owing  to  a  bad  management,  thriv- 
ing industries  have  been  wrecked  again  and  again. 
And  as  a  result  whole  villages  have  been  ruined.  All 
property  in  real  estate  has  declined  and  working  men, 
obliged  to  move  to  places  where  work  can  be  found, 
have  lost  all. 

Fourth.  In  order  to  the  most  efficient  production, 
all  our  industrial  and  commercial  activities  should  be 
correlated  and  integrated  into  one  whole.  But  under 
the  present  system  this  too  is  impossible. 

Two  factors  prevent  it. 

First,  the  rivalry  of  industrial  barons  themselves 
and  their  constant  struggle  for  power.  For  no  sooner 
is  any  industry  apparently  integrated  under  one  vast 
monopoly  or  Trust,  than  weakness  creeps  in,  opposition 
and  rivalry  organize  from  without,  and  soon  Trust  is 
followed  by  Trust, — just  as  in  the  States  of  South 
America,  government  follows  government,  and  revolu- 
tion follows  revolution.  Thus,  there  is  no  permanent 
and  abiding  co-ordination  and  integration. 

Then,  secondly,  the  people,  suspicious  of  Trusts,  are 
opposed  to  any  such  integration  of  our  industrial  activi- 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  65 

ties  in  view  of  the  present  control  of  all  industries  by 
the  few.  Hence  we  have  laws  against  such  co-ordina- 
tion and  integration,  making  anything  like  a  full  inte- 
gration of  our  industrial  life  an  impossibilty. 

There  are  other  evils  of  the  gravest  kind  of  a  gen- 
eral character,  which  hinder,  and  at  times,  almost  arrest 
active  production.     To  these  I  can  only  refer. 

First.  The  constant  importation  of  ignorant,  cheap 
labor  makes  it  impossible  even  with  a  vocational  school 
system, — to  maintain  a  generally  skilled  workmanship. 
And  while  this  cheap  labor  serves  the  ends  of  plutocracy, 
yet  it  makes  it  impossible  ever  to  make  American  in- 
dustries the  most  productive.  It  means  a  terrible 
impoverishment  of  production  in  the  aggregate. 

Second.  Certain  American  Industries  are  greatly 
enfeebled  and  even  destroyed,  in  certain  localities,  by 
the  greed  of  the  corporations. 

The  Beef  trust  by  the  destruction  of  the  local  slaugh- 
ter-houses and  the  low  prices  which  it  pays  to  the 
cattle  raiser,  has  virtually  annihilated  cattle  raising  for 
beef  in  the  East  and  has  driven  multitudes  out  of  the 
business  in  the  West.  The  result  is  an  actual  scarcity 
of  beef  in  the  country.* 

The  Trusts  pay  such  low  prices  to  the  farmer  for 
his  products,  and  yet  charge  such  high  prices  for  their 
own  products  sold  to  him,  and  Labor  organizations 
have  so  raised  wages,  that  the  American  farmer  can 
scarcely  live.  The  result  is  that  the  American  farmer 
is  being  depressed  into  a  peasant  class.     Many  Ameri- 

*See  Greatest  Trust  in  the  World  by  C.  E.  Russell,  Chap.  VI. 
"Blight  of  a  Greedy  Monopoly." 


66  EFFECTIVE    INDUSTRIAL    REFORM. 

can  farms, — especially  in  the  East, — which  could  be 
run  at  a  profit  were  it  not  for  the  greed  of  the  Trust, 
are  abandoned. 

Many  local  industries  could  be  started  and  run  at 
a  profit,  were  it  not  for  the  tyranny  of  the  Trusts  which 
holds  the  club  over  every  enterprising  man  and  says — 
"Go  into  this  industry  at  your  peril." 

It  is  also  a  fact  that  many  a  railroad  and  other  in- 
dustry is  handicapped  and  even  made  prostrate,  for  a 
time,  because  looted  by  those  in  control. 

Again.  The  greed  of  plutocracy  has  largely  de- 
stroyed a  good  portion  of  the  home-market  for  our  com- 
modities. In  order  to  have  a  home  market,  the  people 
must  have  money  with  which  to  buy.  In  order  to 
have  money  with  which  to  buy,  the  people  must  be 
paid  a  just  wage.  But  plutocracy,  by  depriving  the 
people  of  their  just  wages,  makes  it  impossible  for  the 
people  to  buy.  The  home  market  is  thus  destroyed. 
And  we  have  periodically  granaries  filled  with  grain 
which  the  people  cannot  buy, — though  starving  for 
bread.  We  have  store-houses  filled  to  the  roof  with 
clothing  which  the  people, — though  naked,  cannot 
purchase.  The  result  is  an  arrest  of  production, — 
while  the  people  are  hungry,  naked,  and  without  shelter . 

Finally.  In  the  mad  struggle  for  immediate  wealth, 
in  the  rash  fever  of  speculation,  the  pushing  up  of  ficti- 
tious values,  the  wild  extension  of  credit,  the  looting 
of  Industries,  the  failure  to  make  good  the  promises 
most  solemnly  made,  there  comes  the  periodic  panic. 
And  with  the  loss  of  all  confidence,  there  follows  a 
prostration  of  all  business,  from  which  recovery  is  very 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  67 

slow.     In  the  meanwhile  there  is  anxiety,  suffering  and 
frequent  deaths  by  suicide. 

With  these  conditions  prevailing,  who  will  say  that 
our  American  industries  are  the  most  productive  pos- 
sible? Is  not  our  boasting  in  this  matter  utterly  un- 
founded? Not  until  we  overthrow  the  power  of  organ- 
ized plutocracy,  root  and  branch;  not  until  we  find 
some  effective  way  by  which  to  introduce  organized 
co-operation,  directed  by  the  sovereign  will  of  the 
people,  in  its.  place;  not  until  we  are  able  to  secure 
and  perpetuate  the  most  efficient  management;  give 
every  working-man  a  personal  interest  in  the  work  in 
which  he  is  engaged;  banish  the  terrible  strife  now  pre- 
vailing between  capital  and  labor,  on  the  one  hand,  and 
between  capitalist  and  capitalist,  on  the  other  hand; 
not  until  we  can  co-ordinate  and  integrate  all  our 
industries  into  one  grand  whole,  and,  we  may  add, 
place  all  in  the  direct  control  of  the  people,  can  pro- 
duction attain  to  its  highest  level.  But  there  is  still 
more  to  follow. 

4. 

Fourth  Evil  Fruit  of  this  New  Despotic  Power — Des- 
truction of  American  Civilization. — Our  present  system, 
with  its  gross  injustice  and  arrogant  plutocracy,  is  fast 
destroying  American  civilization  and  American  liberty; 
it  stands  in  the  way  of  all  progress ;  it  is  overthrowing 
the  sovereignty  of  the  people  in  these  United  States  and 
is  driving  us  fast  toward  social  war. 

For  first.  Our  present  system  is  one  of  the  might- 
iest agents  working  for  the  elimination  of  the  best  and 
the  perpetuation  of  the  worst  elements  of  society. 


68  EFFECTIVE    INDUSTRIAL    REFORM. 

For  the  one  law  standing  at  the  door  of  every  job 
in  the  gift  of  the  corporation  is — "  to  the  man  who  will 
work  the  cheapest."  In  short,  whosoever  is  willing  to 
sink  himself  the  nearest  to  the  level  of  the  brute  gets 
the  job.  Competition  among  working  people  is  chiefly 
a  competition  in  self-degradation.  The  skilled  worker 
underbids  the  skilled  worker  and  forces  the  wages  of 
both  down  to  that  of  common  labor.  And  common 
laborer  underbids  common  labor  and  forces  both  down 
to  starvation  wages.  The  result  is  that  working  people 
are  ever  thrust  downwards  to  an  ever  lower  standard 
of  living  without  knowing  what  is  the  agent  that  is 
thrusting  them  down.  The  increasing  prevalence  of 
rural  degeneracy  and  the  constant  increase  of  the  slum 
population  in  our  cities  are  both  the  product  chiefly  of 
evil  industrial  conditions. 

But  this  is  not  all.  Our  present  system  calls  in  the 
most  depressed  classes,  by  immigration,  from  the  old 
world.  For  here  too  the  law  is  that  the  job  is  given  to 
the  immigrant  who  will  work  the  cheapest.  The  result 
is  that  our  present  system  calls  in  and  finds  work  chiefly 
for  the  most  ignorant.  The  labor  saving  machine  of 
today  takes  the  place  of  intelligence  in  the  worker. 
One  intelligent  man  can  direct  fifty  or  a  hundred  un- 
intelligent. Hence,  wave  after  wave  of  the  most  de- 
pressed people  of  the  old  world  pours  into  this  country 
and  reinforces  the  depressed  classes  already  here. 

But  if  our  present  system  perpetuates  and  calls  in 
the  weaker  classes,  it  is  also  a  most  powerful  agent  in 
eliminating,  by  race  suicide,  the  best. 


Typical  Common  Working  Man's  Cottage  in  a  Berkshire 
Village. 


Double  Cottage.    Rent  for  half  cottage  on  left — no  bath — $100. 

Pay  of  common  workman $540 

Rent  for  half  cottage $100 

Water  tax  paid  to  corporation 15 

Coal,  six  tons  at  $7.50 45 

Total $160 

Amount  left  for  food,  clothing,  doctor  bills,  etc $380 

With  such  an  income  the  wife  must  work  out  or  take  in  work 
to  live. 


Note. 

Investigation  shows  that  thousands  of  tenements  in  our  cities, 
which  are  fair  without  and  charge  an  enormous  rent  are  the  abode 
of  destitution  and  poverty  because  of  the  low  pay  of  the   worker. 

A  large  part  of  the  wretchedness  caused  by  our  present  evil 
system  is  thus  kept  out  of  sight. 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  69 

For  intelligent  young  people,  both  native  and 
foreign  born,  refuse  to  marry  and  bring  children  into 
the  world  under  the  arduous  conditions  created  by  a 
greedy  plutocracy.*  And  for  any  race  to  rise  in  intelli- 
gence and  standard  of  living  means  its  quick  melting 
away  by  race  suicide,  like  snow  before  the  sun  of  spring. 

Around  Shawmut  Avenue  Congregational  Church, 
Boston,  is  a  population  of  about  35,000  souls  which 
represents  the  aspiring  middle  classes,  native  and 
foreign.  And  yet  among  all  that  number,  I  have  been 
told  by  good  authority  that  there  is  scarcely  a  single 
home.  That  vast  population  is  a  population  of  lodgers 
who  are  either  unmarried,  or  if  married,  largely  childless. 
And  that  section  of  Boston  is  typical  of  large  areas  in 
all  our  cities. f  The  people  who  marry  and  bear  children 
are  the  thoughtless  depressed  classes  in  the  slums. 

Now,  these  facts  alone  mean  in  time  the  destruction 
of  American  civilization. 

For,  first,  the  most  backward  classes  from  the  old 
world  keep  pouring  in  and,  filling  our  villages  and 
cities,  make  up  the  bulk  of  the  population.  They  pour 
in  far  faster  than  it  is  possible  to  achieve  their  trans- 
formation by  school  and  church. 

And  since  to  elevate  any  class  means  its  quick 
elimination  by  race-suicide  and  its  displacement  by  a 
lower  class  or  race,  the  schools  and  churches  fight  a 
losing  battle.  The  population  of  the  country  becomes 
increasingly  ignorant,  degenerate  and  un-American. 

♦See  Races  and  Immigrants  in  America,  p.  202-204, — by  Prof. 
John  R.  Commons. 

fSee  The  Lodging  House  Problem  in  Boston, — by  Albert  Ben- 
edict Wolfe,  Ph.D. 


70  EFFECTIVE    INDUSTRIAL    REFORM. 

Second,  this  elimination  of  the  best  and  perpetuation 
of  the  worst  means  to  fight  a  losing  battle  with  the 
saloon  and  other  social  evils.  For  while  the  voters  for 
the  saloon  are  constantly  reinforced  by  race  propagation 
and  immigration,  the  voters  against  the  saloon  and  other 
vices  are  ever  melting  away  by  race-suicide.  For  the 
same  reason  we  are  fighting  a  losing  battle  against 
ignorance,  lawlessness,  crime  and  political  corruption. 

Third.  For  the  same  reason,  American  schools  and 
churches  are  fighting  a  losing  battle  in  the  moral  and 
religious  realm. 

The  great  principles  of  true  religion  are  truth,  jus- 
tice, and  mercy  with  faith  in  God  and  the  life  eternal. 
True  religion  means  an  intelligent  manhood  and  woman- 
hood,— a  knowledge  of  one's  rights  and  courage  to 
maintain  them, — it  means  also  a  respect  for  the  rights 
of  others,  and  a  determination  to  defend  them  equally 
with  one's  own.  True  religion  means  love  for  all  men 
and  all  that  that  implies.  It  means  a  large  united, 
national  spirit  and  life  and  reverence  for  God. 

Now  it  is  the  grand  aim  of  American  civilization  to 
imbue  and  elevate  the  whole  nation  with  the  spirit  of 
these  truths  and  to  bring  all  the  people  under  one  public 
school  system  and  into  one  pure  and  free  church. 

But  it  is  a  simple  fact  that  the  constant  coming  in 
of  ignorant  populations,  by  immigration,  and  the  elimi- 
nation of  the  best  by  race-suicide  make  it  well  nigh 
impossible  to  realize  this  aim. 

Not  only  are  the  incoming  populations  increasingly 
ignorant  but  alien  schools  and  churches  brought  in 
with  the   tide   of  immigration,   are   un-American,   and 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  71 

build  a  wall  of  separation  around  their  members  shut- 
ting them  out  from  the  great  uplifting  educational  and 
religious  forces  of  the  land,  and  prevent  the  develop- 
ment of  a  common  elevated  moral  and  religious  life. 

The  result  is  that  the  population  in  our  cities,  in- 
stead of  being  gradually  uplifted,  becomes  increasingly- 
ignorant  and  even  criminal.  And  our  American  schools 
and  churches  cannot  reach  them.  Impassable  barriers 
are  reared  all  around  them.  And  they  either  remain 
as  densely  ignorant  and  servile  in  mind  as  when  they 
came,  or,  if  uplifted,  they  melt  away  by  race-suicide, 
and  other  more  ignorant  peoples  come  in  to  take 
their  place. 

As  a  result,  in  large  sections  of  our  cities,  American 
civilization,  distinctively  so  called,  with  its  free  schools 
and  high  religious  ideals,  has  been  destroyed ;  and  every 
where  it  is  threatened,  if  not  with  destruction,  at  least 
with  arrested  development,  unless  these  evils  created  by 
our  industrial  system  can  be  removed. 

And  no  mere  restriction  of  immigration — however 
desirable  for  certain  reasons,  will  save  us.  England, 
Belgium,  France,  Italy,  Spain,  are  not  overwhelmed 
by  an  alien  immigration,  and  yet  their  condition  is 
worse  even  than  ours.  What  we  need  is  not  a  new 
immigration  law — although  that  might  help  us — but  a 
New  Industrial  System;  a  system  that  will  grant  jus- 
tice to  all  and  be  governed  not  by  a  greedy  plutocracy 
but  by  the  sovereign  will  of  the  people;  a  system  that 
will  call  in  not  the  worst  but  the  best  of  the  old  world 
immigration  and  old-world  religion;  a  system  that 
will  grant  justice  to  both  Immigrant  and  American-born 


72  EFFECTIVE    INDUSTRIAL    REFORM. 

alike;  a  system  that  will  fix  wages  not  according  to  the 
present  brutal  law  of  supply  and  demand  but  according 
to  each  man's  individual  worth.  When  this  is  done  the 
evils  of  Immigration  and  race-suicide  will  be  largely 
self -corrective  as  can  be  readily  shown. 

But  so  long  as  the  present  evil  system  endures — a 
system  which  cares  neither  for  the  good  of  the  country, 
the  welfare  of  the  immigrant,  nor  the  rights  of  the  people 
already  here;  a  system  in  which  greed  sits  enthroned 
and  whose  only  aim  is  to  get  labor  as  cheap  as  hunger, 
dependent  families  and  brutal  competition  can  force 
human  souls  to  take — so  long  as  this  system  endures, 
there  is  little  hope  for  American  religion  and  American 
civilization. 

2.  But  this  is  not  all.  Our  present  system  creates 
conditions  in  the  lower  half  of  the  population  in  which 
character  cannot  grow. 

The  necessary  home  maker  is  the  wife  and  mother. 
And  her  place  is  in  the  home.  But  for  the  lower  five 
millions  of  families  in  these  United  States,  in  city  and 
country,  the  wife  and  mother  is  compelled  by  dire 
necessity  to  be  a  worker  in  the  factory,  or  in  the  field, 
or  in  the  homes  of  the  wealthy  as  wash-woman;  or, 
when  she  stays  at  home,  she  must  take  in  work  far 
beyond  her  strength  which  commands  all  her  time. 
The  mother  at  work  in  the  factory  will  work  up  to 
within  two  or  three  days  of  her  baby's  birth  and  will 
begin  work  again  two  or  three  days  after  its  birth. 
The  baby  therefore  receives  no  proper  care.  Hastily 
nursed  by  the  mother  in  the  morning  before  the  mother 
goes  to  her  day's  work,  it  is  left  to  the  careless  charge 


Note. 

(1) 

In  the  Carnegie  Steel  Plants  in  Pittsburg,  Pa.  (1909)  the  vast 
majority  of  the  men  are  paid  only  from  one  to  two  dollars  a  day, 
for  12  hours  work. 

This  pay  is  sufficient  to  support  a  single  man,  but  not  a  man 
with  a  family.  The  wife  and  mother,  therefore,  must  become  a 
wage-earner  to  live. 

(2) 

The  result  is  that  in  Pittsburgh,  there  are  more  than  22,000 
women  at  work  for  wages,  and  many  more  going  out  by  the  day 
or  taking  in  work  or  boarders. 

The  pay  of  60%  of  these  women  is  only  from  50  cents  to  one 
dollar  a  day.  And  yet  no  woman  can  support  herself  properly 
on  less  than  $7  a  week. 

The  result  is  that  thousands  of  girls  are  under-fed  or  under- 
clothed  or  forced  into  immoral  lives,  and  many  thousands  of  babies 
are  not  properly  mothered. 

See  the  Pittsburgh  Survey  in  the  Jan.,  Feb.  and  March  numbers 
(1909)  of  The  Survey. 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  73 

of  an  older  child.  Again  it  is  hastily  nursed  at  noon, 
again  left,  and  again  nursed  at  night  when  the  mother 
returns.  The  result  is  that  there  is  constant  indiges- 
tion and  suffering  on  the  part  of  these  innocent  victims 
of  plutocracy.  And  large  numbers  of  the  babies  of  the 
poor  perish  before  they  reach  five  years  of  age.  Those, 
children  who  survive  this  period  grow  up  in  the  streets. 
The  boys  form  themselves  into  gangs  and  early  learn 
to  drink  and  gamble.  The  girls  grow  up  untrained 
only  to  repeat  the  arduous  lives  of  their  mothers  before 
them.  The  result  is  that  church  and  school — in  the 
words  of  General  Booth — "are  fighting  a  losing  battle." 
Under  such  conditions  character  has  no  chance  to  grow. 
Crimes  are  committed  in  our  cities  which  we  once 
thought  belonged  only  to  the  misgoverned  country  of 
Italy  of  three  generations  ago.  Men  talk  of  the  ignor- 
ance of  the  wives  and  mothers  of  the  lower  classes — 
and  of  the  vicious  habits  of  the  men.  But  this  ignorance 
on  the  part  of  the  motherhood  and  this  vicious  char- 
acter sometimes  seen  in  the  manhood  of  the  poor  are 
the  direct  and  inevitable  product  chiefly  of  the  greed 
of  that  plutocracy  whose  iron  heel  is  on  all  our  necks. 
Pay  the  lower  classes  a  just  wage  and  both  ignorance 
and  viciousness  will  disappear. 

3.  But  this  is  not  all.  The  curse  of  plutocracy 
is  not  only  on  the  poor  but  on  the  rich.  For  it  is  an 
appalling  fact  that  the  immorality  fast  increasing 
among  the  wealthy  classes  is  such  as  we  should  expect 
only  among  the  most  degraded.  Shameless  licentious- 
ness, extravagant  waste  of  wealth  by  people  who  never 
lifted  a  finger  to  earn  it,  that  mad  jealousy  the  fruit  of 


74  EFFECTIVE    INDUSTRIAL     REFORM. 

which  is  open  homicide — and  which  goes  without 
punishment — are  the  frequent  deeds  of  the  idle  rich. 
These  statements  are  not  too  severe  for  those  who  read 
the  papers  and  know  the  facts.* 

4.  Worst  of  all,  those  customs  and  high  ideals 
which  civilization  has  labored  painfully,  through  thous- 
ands of  years,  to  establish,  many  of  the  wealthy  class 
are  ruthlessly  breaking  down, — and  this,  because  of  that 
pride  of  unlimited  power  which  makes  them  fear  neither 
God  nor  man.  They  disdain  obedience  to  any  law  ex- 
cept their  own  self-will  and  pleasure.  And  their  exam- 
ple corrupts  the  whole  nation  and  makes  progress  im- 
possible. 

5.  In  the  meantime  plutocracy  controls  the  govern- 
ment and  has  practically  destroyed  the  sovereignty  of 
the  people.  And  that  terror  which  plutocracy  inspires 
in  all  dependent  on  it  for  bread  amounts  to  a  real  sup- 
pression of  liberty  of  speech  and  act. 

6.  All  these  evils — especially  the  anxieties  and  the 
sufferings  of  the  people  which  are  fast  becoming  intol- 
erable, are  creating  a  spirit  of  discontent,  of  despera- 
tion, which  throws  over  us  the  terrible  menace  of 
social  war. 

Wherever  I  go,  even  among  the  farming  class,  I  fre- 
quently hear  the.  bitter  words — "  We  must  have  a 
change  or  there  will  be  war." 

♦The  frequent  divorce  suits  among  the  wealthy — The  case  of  a 
certain  American  heiress  and  her  two  husbands  abroad, — The  shoot- 
ing of  one  man  by  another  in  a  theatre  and  the  revelations  made  in 
connection  therewith — The  shooting  of  another  man,  at  a  certain 
club-house  by  a  jealous  husband  and  the  scandalous  relations  dis- 
closed— are  recent  illustrations  of  the  truth  of  the  above  statement. 


THE    NEW    DESPOTISM ITS    EVIL    FRUIT.  75 

Out  in  Colorado  we  have  had  conditions — and  these 
conditions  still  persist  in  fact — verging  upon  real  social 
war.  Down  in  Kentucky  (in  1908)  and  in  three  other 
States,  farmers  met,  read  the  Bible,  (especially  those 
passages  calling  on  God  to  avenge  the  oppressed),  and 
then  with  hymns  on  their  lips  went  forth  to  burn  the  ware- 
houses of  the  Trust  that  oppressed  them,  to  punish  recal- 
citrant members  of  their  own  class,  and  even  to  hang  or 
shoot  down  the  corporation  lawyer  and  another  henchman 
of  the  Trust.  These  men  and  women,  made  desperate 
by  their  sufferings,  believed  that  they  were  fighting  in 
as  noble  a  cause  as  our  fore-fathers  who  spilled  the  tea 
in  Boston  harbor  and  shot  down  British  regulars  behind 
stone  walls.     All  this  is  incipient  social  war. 

And  in  our  cities  are  not  only  a  vast  hungry  suffer- 
ing class  without  work  and  without  bread,  but  there 
are  such  bodies  as  the  Cicilian  black-hand  which  wreck 
many  storied  buildings  with  dynamite;  and  in  case  of 
a  popular  uprising  would  inject  into  the  conflict  terrible 
violence  and  bloodshed. 

These  signs  are  ominous.  Only  the  criminally  blind 
can  fail  to  read  them.  And  yet  just  as  it  was  before 
our  civil  war,  just  as  it  was  before  the  French  revolu- 
tion, the  people  disregard  all  these  tokens  and  say — 
peace,  peace. 

Some  say  that  the  superior  intelligence  of  the  Amer- 
ican people  will  never  permit  war.  But  it  is  the  superior 
intelligence  of  the  American  people,  and  the  existence 
of  the  public  school,  that  intensifies  the  menace  of  social 
war.  For  it  is  not  the  most  ignorant  but  the  most 
intelligent  classes  who  refuse  to  submit  to  the  crushing 


76  EFFECTIVE    INDUSTRIAL    REFORM. 

heel  of  despotic  power.  It  is  the  existence  of  an  intelli- 
gent class  who  know  their  rights  and  dare  maintain 
them,  that  constitutes  the  chief  threat  of  war  when 
despotic  power  becomes  enthroned,  and  peaceful  remedies 
fail. 

These  things  declare  unmistakably  that  we  are 
approaching  a  crisis  in  American  history.  A  crisis, 
when  the  people  must  decide  whether  they  will  resolutely 
arouse  all  their  powers  and  work  out  a  reform  of  present 
conditions  or  drift  with  increasing  rapidity  out  toward 
the  tossing  sea  of  utter  disorder,  riot,  and  social  war. 
And  let  not  those  who  are  now  intrenched  in  wealth 
and  power  think  that  they  shall  escape. 

"Unchanging  law  together  binds 

Oppressor  and  oppressed. 
Though  sundered  far  in  rank  and  pride, 

They  march  to  fate  abreast." 

Which  then  shall  we  choose — riot  and  revolution,  or 
peaceful  and  yet  effective  Industrial  reform  ?  The 
leaders  of  reform  are  counseling  patience  on  the  part  of 
the  people.  Their  appeal  is  to  reason  and  the  ballot; 
and  by  this  sign  they  hope  to  conquer.  But  if  the 
reform  is  delayed  too  long,  until  patience  is  exhausted 
and  the  people  become  desperate,  who  can  tell  what 
scenes  of  blood  and  what  confusion  and  war  may  be 
enacted? 

In  the  following  Chapters,  I  shall  unfold  the  way  by 
which  to  escape  confusion  and  war  and  achieve  Effec- 
tive Industrial  Reform. 


ADDENDUM  TO  PART  I. 

Five  pictures  illustrating  the  evil  fruits  already  produced  by  the 
competitive  Industrial  system  in  Europe. 


The  first  of  Five  Cuts  Illustrating  the  Effect  of  Our  Industrial 
System  in  Europe,  especially  among  women. 


This  woman,  in  Holland,  and  her  husband  own  their  own  boat. 
But  their  pay  is  so  small  that  they  can  live  only  by  her  doing  the 
work  of  a  mule  on  the  tow-path. 

This  and  the  four  following  cuts  were  supplied  by  courtesy  of 
the  Woman's  Home  Companion,  copyrighted  by  the  Crowell  Pub- 
lishing Company,  1907. 


For  twelve  hours  a  day  this  Belgian  girl,  only  twenty  years 
old,  works  at  brick  making,  the  very  hardest  work  in  the  world. 
She  is  paid  from  16  to  25  cents  a  day. 

The  wages  of  the  women  in  these  cuts  were  learned  by  inquiries 
of  native  Europeans. 

One  out  of  every  three  wage  workers  in  factory  and  on  farm  in 
Belgium  is  a  woman. 


Women  are  cheaper  than  oxen  in  Russia.  Here  is  a  team  of 
fourteen  women,  harnessed  to  the  plow.  They  are  paid  from  5  to 
10  cents  a  day.     Many  die  of  starvation  during  the  winter. 


Will  women  in  America  become  the  drudges  that  they  are  in 
Europe? 

The  inevitable  tendency  is  in  that  direction. 

For,  first,  the  law  of  competition,  with  easy  migration,  must 
reduce  all  below  the  Capitalist  class  to  the  same  level  in  both  Eu- 
rope and  America. 

Second,  already  the  wages  of  men  in  America  are  so  reduced 
that  for  the  lower  half  of  society  the  wife  and  mother  must  be- 
come a  wage  earner  to  live. 

Third,  already  there  are  five  million  women  wage  earners  in 
the  United  States  (census  1900). 

This  means  a  million  wives  and  mothers  taken  from  their 
homes  and  sent  into  the  factories. 

It  means  two  or  three  million  children  not  properly  mothered. 

It  means  a  million  girls  engaged  in  work  prejudicial  to  the 
health  of  growing  girlhood. 

It  means  another  million  girls  underpaid  and  tempted  to  im- 
moral lives. 

Finally,  in  all  our  cities,  and  on  the  truck  farms  and  berry 
farms  in  the  South  and  other  places,  woman  has  already  reached 
the  level  of  her  sisters  in  Europe.     See  The  Survey,  Aug.  7,  1909. 


Part  II.     Method  of  Effective 
Reform 

CHAPTER  V. 

OUR  GENERAL  PLAN  OF  REFORM. 

What  is  the  general  method  of  our  plan  of  reform? 

We  shall  never  reform  present  evils  in  the  industrial 
and  commercial  world  merely  by  a  "revival  of  piety" 
among  the  people,  or  a  return  to  the  "religion  which 
father  had."  All  such  advice  by  diverting  the  mind 
away  from  the  root  of  the  evil  is  but  the  Judas  kiss 
which  betrays  humanity.  It  was  not  the  loss  of  piety 
which  brought  on  present  wrongs;  and  no  mere  re- 
vival of  piety  will  cure  them. 

Neither  will  we  cure  present  evils  by  impressing 
the  mind  of  the  Oligarchy  in  control  with  a  "high 
sense  of  Christian  stewardship."  All  such  counsel 
utterly  ignores  the  cause  of  present  wrongs.  One 
might  as  well  think  of  curing  the  troubles  of  Russia 
by  teaching  the  Tzar  a  "higher  sense  of  Christian 
stewardship." 

Neither  will  we  cure  present  evils  by  maintaining 
the  private  ownership  of  the  corporation  with  strict 
government  control.  This  is  the  Rooseveltian  remedy. 
Mr.  Roosevelt  advocated  the  election  of  Mr.  Taft  on  the 
ground  that  his  experience  and  abilities  fitted  him  to 
enter  into  the  offices  of  the  big  Corporations  and  dictate, 
wages,  prices  and  dividends  so  as  to  bring  justice  to  all 
parties  concerned.     But  does  any  sane  man  believe  for 


78  EFFECTIVE    INDUSTRIAL    REFORM. 

a  moment  that  any  government  official  will  have  the 
ability  or  the  courage  to  go,  Caesar-like,  into  the  offices 
of  these  big  corporations  and  say  what  wages  they  shall 
pay,  what  prices  they  must  charge,  and  what  dividends 
they  shall  be  permitted  to  earn? 

Besides  such  an  act  is  absolutely  unconstitutional. 
If  these  corporations  are  private  concerns,  and  they 
certainly  are,  the  President  of  the  United  States  has  no 
more  right  to  enter  into  their  offices  and  dictate  wages, 
prices  and  dividends,  than  to  go  onto  the  land  of  the 
farmer  and  say  what  wages  he  shall  pay,  what  prices 
he  must  charge  and  what  profits  he  shall  be  permitted 
to  earn. 

And  should  our  president  attempt  such  a  thing  in 
relation  to  the  big  corporations,  he  will  be  commanded 
in  the  name  of  the  constitution  and  the  rights  of  private 
property  to  keep  out. 

Neither  will  we  remedy  present  wrongs  by  abolish- 
ing the  corporation  and  turning  our  industrial  and 
commercial  activities  over  to  governmental  ownership 
and  governmental  control  as  these  terms  are  now  used. 
The  prevailing  tendency  of  popular  sentiment  is,  in- 
deed, in  this  direction.  But  I  am  convinced  that  all 
such  tendencies  are  a  mistake  and  will  end  only  in 
making  conditions  worse  than  now. 

For,  in  the  first  place,  in  order  to  secure  and  main- 
tain an  efficient  economic  system,  it  can  be  shown, 
that  we  must  keep  economics  and  politics  entirely  dis- 
tinct. We  must  have  one  agent  to  run  the  govern- 
ment and  another  agent  to  run  our  industrial  and  com- 
mercial activities.     To  mix  the  two,  or  combine  them 


OUR    GENERAL    PLAN    OF    REFORM.  79 

under  one  system,  will  inevitably  result  in  confusion, 
graft,  and  inefficiency  in  both. 

Second.  In  order  to  secure  and  maintain  efficiency 
in  our  economic  system,  it  must  be  based  upon,  and 
grow  out  of,  an  intensified  sense  of  individual  respon- 
sibility and  individualized  self-help.  And  it  must  make 
it  impossible  for  the  idle  and  shiftless  classes  to  load 
themselves  undetected  onto  the  industrious  and  efficient. 

Now  it  can  be  shown  that  government  ownership 
will  largely  destroy  the  factor  of  individual  responsibility 
and  make  it  easy  for  the  idle  and  shiftless  to  load  them- 
selves onto  the  industrious  and  efficient  and  not  be 
found  out.  When  six  men  pull  a  coach  together,  it  is 
easy  for  one  man  to  shirk  his  duty  and  escape  detection. 
Such  will  be  inevitably  the  case  with  government 
ownership.  Government  ownership  means  commun- 
ism, and  communism  will  not  work. 

Third.  In  order  to  meet  all  economic  needs,  we 
must  have  an  economic  system  that  will  not  destroy, 
but  serve  as  the  agent  of  the  whole  people,  in  the  ac- 
quistion  of  individual  wealth  and  gain.  Our  new  eco- 
nomic system  must  be  subordinate  to  the  acquisition, 
not  of  communistic,  but  individual  wealth. 

Every  economic  system  adequate  for  the  needs  of 
man  must  achieve  three  functions.  First.  It  must 
provide  work  for  all  the  people  at  just  wages.  Second. 
It  must  supply  commodities  at  a  fair  price.  Third — 
and  crowning  all — it  must  provide  a  place  where  the 
people  can  invest  their  increasing  savings,  earn  divi- 
dends, and  accumulate  individual  wealth  and  gain. 
And   this   last   function  must    in   no    case    be    omitted 


80  EFFECTIVE  INDUSTRIAL  REFORM. 

or  exscinded.  It  is  the  supreme,  and  in  some  ways 
most  important  function  of  all. 

We  must  have,  it  is  true,  combination  and  co-oper- 
ation in  the  production  of  wealth;  but  we  must  have 
individualization  in  its  distribution.  No  communistic 
system  in  relation  to  the  possession  of  wealth  will  work 
or  meet  the  needs  of  man.  But  it  is  a  simple  fact  that 
all  forms  of  direct  government  ownership  exscind  this 
crowning  function  of  our  economic  life,  and  make  im- 
possible the  individual  acquisition  and  ownership  of 
wealth.  Suppose,  for  example,  that  we  should  turn  all 
our  industries  over  to  government  ownership  and  con- 
trol, as  exemplified  in  the  United  States  Mail — raising 
the  capital  by  taxation  and,  of  course,  paying  no  divi- 
dends— what  would  be  the  result  in  our  economic 
system?  It  would,  as  can  be  seen  at  once,  cut  off 
forever  all  possibility  of  any  one's  investing  his  savings 
any  where,  it  would  cut  off  all  earning  of  dividends  and  all 
acquisition  of  individual  capital  and  individual  wealth. 

But  such  a  system  is  essentially  communistic.  It 
will  not  work  nor  meet  the  needs  of  man.  I  shall 
speak  of  this  again. 

No  form,  therefore,  of  governmental  ownership, 
properly  so-called,  will  meet  the  needs  of  the  case. 
Government  ownership  will  result  only  in  confusion, 
graft,  the  weakening  of  individual  responsibility  and 
individual  self-help,  and,  worst  of  all,  in  the  destruction 
of  all  acquisition  of  individual  wealth. 

And  all  attempts  to  reform  present  evils  by  political 
methods  chiefly,  are,  I  believe,  essentially  wrong,  and 
will  result  in   disappointment   and   failure.     Industrial 


OUR    GENERAL    PLAN    OF    REFORM.  81 

reform,  whatever  it  may  be,  must,  without  doubt,  be 
introduced  and  maintained  by  the  sovereignty  of  law. 
But  the  reform  proper  must  be  essentially,  not  political, 
but  economic.  What  we  need  and  what  we  must  have, 
is  not  a  new  political,  but  a  new,  economic  system, — a 
new  economic  system  that  will  overthrow  despotic 
power,  make  the  people  supreme,  and  bring  justice 
and  equal  opportunity  into  our  whole  industrial  and 
commercial  life. 

2. 

Where  shall  this  reform  begin? — In  order  to  effect 
a  lasting  remedy  of  present  wrongs  we  must  go  right 
back  to  that  point  where  we  made  our  initial  fail- 
ure. The  cause  of  present  evils  lies,  as  I  have  shown, 
in  the  fact  that  the  people  in  earlier  years  failed  to  as- 
sume resolute  collective  control  over  their  growing 
industrial  and  commercial  life,  and  the  consequent 
coming  in  of  injustice  and  despotic  power.  In  order, 
therefore,  to  cure  present  wrongs,  we  must  go  right 
back  to  that  point  where  we  made  our  initial  failure 
and  do  two  things. 

First,  we  must  overthrow,  root  and  branch,  the  power 
of  a  despotic  oligarchy  and  assume  resolute  collective 
control  over  our  whole  industrial  and  commercial  system. 

No  other  policy  will  avail.  So  long  as  despotic 
power  is  enthroned  in  the  industrial  and  commercial 
world,  unspeakable  injustice  and  wrong  will  continue 
and  will  increase  more  and  more.  For  all  history  shows 
that  human  nature  is  too  weak  to  hold  despotic  power 
for  any  length  of  time  without  abusing  it.  Besides, 
there  'is  something  in  the    possession  of    such  power 


82  EFFECTIVE    INDUSTRIAL    REFORM. 

which  exalts  the  holder  of  it  in  pride  and  makes  him 
incapable  of  appreciating  either  the  ability  or  the  rights 
of  others.  Justice  shall  come  only  when  the  sovereign 
will  of  the  whole  people  is  enthroned. 

But  this  is  not  all.  We  must  also  make  it  our  law  to 
bring  justice  and  equal  opportunity  to  the  whole  people. 
There  are  those  who  would  have  a  reform  that  will 
bring  justice  to  their  own  class,  but  they  do  not  want 
justice  to  descend  to  those  below  them.  But  in  the 
Providence  of  God  and  the  evolution  of  our  industrial 
activities,  we  have  reached  a  condition  when  it  is 
simply  impossible  to  bring  justice  to  any  one  class 
without  bringing  it  to  all.  If,  therefore,  we  would  cure 
present  evils,  we  must  not  only  overthrow,  root  and 
branch,  the  power  of  a  despotic  oligarchy,  and  make 
the  people  supreme,  but  we  must  aim  to  bring  justice, 
equal  opportunity,  education,  refinement  and  every 
other  good  thing  to  every  class  alike.  Any  aim  short 
of  this  will  only  end  in  failure.  Whosoever,  therefore, 
desires  justice  for  only  a  part  of  the  race,  or  desires  to 
see  opportunity  for  graft  and  special  privilege  and  cun- 
ning robbery,  to  continue  as  an  organic  factor  in  our  in- 
dustrial system,  will  find  little  satisfaction  in  the  scheme 
which  we  are  to  unfold. 

What,  then,  we  ask  again,  is  that  new  economic 
method  by  which  we  must  achieve  effective  industrial 
reform  ? 

3. 

The  fundamental  factor  in  the  modern  industrial 
and  commercial  world  is  the  STOCK-CORPORATION. 
This  agent  is  to  the  business  world  to-day  what  civil 


OUR   GENERAL    PLAN    OF    REFORM.  83 

government  is  to  the  political  world.  It  is  the  grand 
instrument,  the  organization,  through  which  men  com- 
bine in  co-operative  effort  in  the  production  and  dis- 
tribution of  wealth.  Its  primary  aim  had  nothing  to 
do  with  spoliation.  It  aimed  merely  to  prevent  that 
waste  and  loss  which  inevitably  result  from  disorgan- 
ized effort  and  competitive  strife  and  war.  It  aimed 
to  unite  its  members  in  co-operative  effort  so  as  to 
achieve  the  greatest  efficiency  in  production  and  secure 
justice  in  the  distribution  of  wealth  among  its  mem- 
bers. And  if  the  Corporation  has  become  the  agent  of 
spoliation  and  despotic  power — and  it  certainly  has — 
it  is  owing  to  the  fact  that  while  the  people  have  been 
asleep  or  warring  with  each  other — a  few  strong  men 
have  quietly  seized  possession  of  the  Corporation  and 
prostituted  it  to  evil  ends.  The  stock-corporation, 
therefore,  is  not  essentially  evil  in  itself.  On  the  con- 
trary, when  properly  controlled,  when,  as  we  shall  see. 
it  becomes  the  agent  of  the  whole  people  for  the  acquisi- 
tion of  wealth,  it  will  be  the  most  efficient  instrument 
for  the  production  and  just  distribution  of  wealth, 
that  has  ever  been  conceived  by  man. 

And  the.  Stock-corporation — like  civil  government, 
"has  come  to  stay.  No  power  on  earth  can  abolish  it. 
All  our  industrial  and  commercial  activities  are  destined 
to  be,  if  they  are  not  already  in  fact,  organized  under 
it  and  brought  under  its  immediate  control.  And  like 
civil  government,  it  is  destined  to  become  one  of  the 
noblest  and  most  beneficent  institutions  on  earth. 

In  order,  therefore,  to  achieve  industrial  reform,  it 
is  foolish  to  think  of  abolishing  the  Stock-corporation. 


84  EFFECTIVE    INDUSTRIAL    REFORM. 

That  is  equally  unnecessary  and  impossible.  In  order 
to  reform  present  evils,  the  thing  to  do,  and  the  only 
thing  to  do,  is  for  the  community  to  own  and  control  the 
Business  Corporation  and  make  it  the  agent  of  the 
whole  people  for  the  acquisition  of  individual  wealth. 

But  how  shall  we  achieve  this  result?  How  shall 
we  come  to  own  and  control  the  business  corporation 
and  transform  it  into  an  agent  of  the  whole  people  for 
the  acquisition  of  individual  wealth? 

We  shall  never  own  nor  control  the  Business  Cor- 
poration, from  without — by  a  vigorous  use  of  the  "big 
stick"  in  enforcing  the  Sherman  anti-trust  law.  The 
efforts  made  in  this  direction  by  so  vigorous  a 
president  as  Mr.  Roosevelt  prove  the  utter  futility  of 
such  efforts  to  curb  despotic  power.  If  the  people 
mean  to  own  and  control  the  Business  Corporation, 
and  make  it  the  agent  of  the  whole  people  for  the  ac- 
quisition of  wealth,  they  must  own  and  control  it,  as 
they  do  civil  government,  from  within.  In  other  words, 
the  people  must  themselves  be  the  Corporation.  In  no 
other  way  can  they  overthrow  despotic  power,  assume 
sovereign  control  over  their  whole  industrial  and  com- 
mercial life,  and  transform  the  Business  •  Corporation 
into  an  agent  of  the  whole  people  for  the  acquisition  of 
wealth  with  justice  toward  all. 

How  then  shall  we  reform  our  present  industrial  sys- 
tem? We  shall  reform  our  present  industrial  system  by 
organizing  the  whole  people  of  each  community  and  ul- 
timately of  the  whole  nation, by  law,  into  a  single,  efficient 
BUSINESS  CORPORATION  modeled  essentially  after 
the  private  stock-corporation,  but  with  every  man  as  a 


OUR    GENERAL    PLAN    OF    REFORM.  85 

shareholder  and  responsible  agent  in  it  for  the  ownership 
and  control  of  our  whole  industrial  and  commercial  life. 

If  we  carefully  examine  the  stock-corporation,  we 
find  that  it  embraces  two  fundamental  factors. 

In  the  first  place,  there  is  the  organization  of  a 
group  of  men  into  a  single  business  corporation  for  the 
collective  ownership  of  the  plant  and  for  co-operative 
effort  in  the  production  and  distribution  of  wealth. 

In  the  second  place,  there  is  the  individual  subscrip- 
tion and  ownership  of  the  capital,  the  earning  of  divi- 
dends and  the  subordination  of  the  whole  to  the  acquisi- 
tion of  individual  wealth  and  gain. 

Thus  while  we  have  combination  and  co-operation 
in  the  production  of  wealth,  we  have,  nevertheless,  in- 
dividualization in  its  distribution. 

If  now,  a  small  group  of  men  can  thus  combine  into 
a  single  corporation  for  co-operative  effort  in  the  pro- 
duction and  just  distribution  of  wealth — if  they  can 
do  this  without  annihilating  the  factor  of  individual 
responsibility,  and  without  destroying  the  acquisition 
of  individual  wealth — why  cannot  a  larger  group  of 
men,  why  cannot,  in  short,  a  whole  community,  in 
town,  city,  state,  or  nation,  combine  by  law  into  a 
single  vast  corporation,  a  single  producing  firm,  for 
the  same  ends  and  with  like  results? 

If  a  few  persons  can  form  themselves,  for  example, 
into  a  Beef  trust  or  corporation,  for  the  collective 
ownership  of  the  beef  industry,  and  yet  make  the  whole 
subordinate  to  the  acquisition  of  individual  wealth  and 
gain,  why  cannot  all  the  people  form  one  great  Beef 
Trust  or  Corporation  for  the  same  ends?     The  profits 


86  EFFECTIVE    INDUSTRIAL    REFORM. 

flowing  from  the  Beef  industry  are  immense.  And 
they  result  in  large  part  from  the  use  of  the  wonderful 
mechanical  inventions  of  the  present  age,  from  improved 
methods  of  operation,  from  the  correlation  and  com- 
bination of  individual  effort.  Now  if  a  few  men  can 
combine  and  cause  those  immense  profits  to  flow  into 
their  own  pockets,  why  cannot  all  the  people  form  them- 
selves by  law  into  a  still  larger  combination,  and  cause 
these  immense  profits  to  flow  back  into  the  pockets 
of  the  whole  people  instead  of  the  pockets  of  the  few  alone  ? 

This  I  maintain  we  can  do  and  this  we  shall  do. 
There  is  no  reason  under  the  sun  why  the  people  of 
each  community  cannot  constitute  themselves  by  law 
into  a  single  producing  firm  or  Business  Corporation 
for  the  co-operative  production  and  just  distribution 
of  wealth.  And  there  is  no  reason,  why,  as  we  shall 
show,  the  people  cannot  individually  subscribe  and  own 
the  capital,  just  as  in  the  private  corporation  and  on 
this  capital  thus  subscribed,  earn  dividends  and  so 
make  the  general  business  corporation  the  agent  of 
the  whole  people  for  the  acquisition  of  individual 
wealth.  But  this  Business  Corporation  shall  be  no 
voluntary  affair.  It  shall  be  established  by  law,  and 
embrace  the  whole  people  like  civil  government.  But 
this  shall  be  explained  later. 

Here  then  is  the  general  plan  of  our  scheme  of  In- 
dustrial reform — the  Business  Corporation — but  the 
Business  Corporation  expanded,  by  law  so  as  to  embrace 
the  whole  people  and  enable  them  to  co-operate  in  the 
most  efficient  production  and  the  just  distribution  of 
wealth. 


OUR    GENERAL    PLAN    OF    REFORM.  87 

Of  course,  there  are  many  problems  to  be  consid- 
ered in  detail  in  unfolding  this  scheme  of  reform.  And 
these  shall  be  considered  in  the  following  Chapters. 
But  we  have  said  enough  to  make  clear  what  is  our 
general  plan. 

My  plan  of  reform,  therefore,  is  not  fundamentally 
political  but  economic.  Although  my  scheme,  shall  be 
introduced  and  maintained  by  act  of  law,  yet  it  is  in 
no  sense,  government  ownership  as  that  term  is  used. 
It  is  not  at  all  my  purpose  to  turn  our  industrial  and 
commercial  activities  over  to  government  administra- 
tion. What  I  advocate  is  a  new  economic  system — 
and  yet  a  system  that  is  an  organic  evolution  out  of 
the  present  system.  I  advocate,  to  repeat,  the  taking 
of  the  present  powerful  and  efficient  Business  Corpora- 
tion, as  our  model,  and  expanding  that  by  law  so  as  to 
embrace  the  whole  people,  constitute  the  whole  people 
by  law  into  a  single  business  organization,  to  own  and 
control  their  own  industries,  and  enable  them  to  co- 
operate in  the  efficient  production  and  the  just  distri- 
bution of  wealth. 

The  only  essential  difference  between  this  Public 
Business  Corporation  which  we  shall  form,  and  the 
private  corporation  which  now  exists  shall  be  in  that 
whereas  in  the  latter  only  a  few  persons  are  members 
of  it  and  reap  the  profits,  in  the  public  corporation,  all 
the  people  shall  be  members  of  it — and  members  of  it 
by  law,  by  right  of  birth  and  demands  of  industrial 
obligation, — and  the  whole  people  shall  reap  the  profits. 

By  this  method,  and  by  this  method  alone,  I  believe 
that  we  shall  not  only  overthrow  despotic  power,  make 


88  EFFECTIVE    INDUSTRIAL    REFORM. 

the  people  supreme,  and  bring  justice  and  equal 
opportunity  into  our  whole  industrial  and  commercial 
life,  but  we  shall  also  emphasize  and  intensify  the  sense 
of  individual  responsibility  and  make  our  whole  indus- 
trial system  subordinate  to,  and  serve  as  the  agent  of, 
the  whole  people  in  the  production  and  acquisition  of 
individual  wealth  and  gain. 

In  the  next  Chapter,  I  shall  unfold  and  illustrate 
this  plan  in  detail  by  outlining  its  fundamental  features. 


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CHAPTER  VI. 

FUNDAMENTAL   FEATURES— FIRST    GROUP. 

A  slight  study  of  the  private  Business-Corporation, 
shows  that  it  embraces  several  fundamental  features. 

First.  There  is  the  organization  of  a  group  of  men 
into  a  single  industrial  or  commercial  corporation  for 
co-operative  effort  in  the  production  and  just  distribu- 
tion of  wealth  among  its  members.  There  is  the  collec- 
tive ownership  of  the  plant. 

Second.  There  is  the  individual  subscription  of  the 
capital  by  each  member  of  the  group  or  corporation. 

Third.  There  is  the  earning  of  dividends  on  the 
capital  invested  and  the  acquisition  of  individual 
wealth. 

Fourth.  There  is  the  gradual  enlargement  of  the 
business  for  the  increased  acquisition  of  wealth. 

Such  are  the  primary  features  of  the  private  business 
corporation.  The  Public  Business  Corporation  which 
we  contemplate  shall  embody  the  same  fundamental 
features.     Let  us  briefly  unfold  them. 

1 

First  Fundamental  Feature. — The  first  fundamental 
feature  of  our  plan  demands  that  each  community 
(in  town,  county,  city,  state,  and  nation), — shall  con- 
stitute itself,  by  law,  into  a  single  BUSINESS  COR- 
PORATION, with  every  citizen  as  a  sovereign,  respon- 
sible agent  in  it,  to  own  and  control  its  own  industries 
and  to  secure  co-operative  effort  on  the  part  of  the 
whole  community  in  the  production  and    just    distri- 


90  EFFECTIVE    INDUSTRIAL    REFORM. 

bution  of  wealth.  We  shall  thus  secure  the  collective 
ownership  of  the  plant. 

This  Public  Corporation  shall  be  no  charity  organi- 
zation. It  shall  be  constituted  by  law  after  strictly 
business  principles.  Its  aim  shall  be  to  achieve  the 
most  efficient  production  and  just  distribution  of  the 
fruits  of  our  industrial  and  commercial  activities. 

It  shall  be  no  communistic  organization,  as  we  shall 
see.  For  it  shall  emphasize  and  be  based  upon  individ- 
ualized responsibility  and  its  aim,  like  the  private  cor- 
poration, shall  be  the  efficient  acquisition  and  just 
distribution  of  individual  wealth. 

In  order  to  introduce  this  feature,  two  steps  are 
necessary.  First,  a  law  would  have  to  be  passed  by 
the  state  or  nation,  permitting  each  community  to 
organize  itself  into  a  public  business  corporation  as  this 
plan  contemplates.  Then,  secondly,  each  community 
would  have  to  adopt  this  plan  for  itself  by  a  majority 
vote,  and  take  the  proper  steps  for  its  organization  as 
the  plan  contemplates;   and  the  work  would  be  done. 

Suppose,  for  example,  that  the  City  of  Chicago  con- 
templated the  adoption  of  this  new  scheme  of  reform 
and  the  application  of  it  at  first  to  its  Street-car  lines. 
What  are  the  steps  by  which  to  proceed? 

First,  a  law  would  probably  have  to  be  passed  by 
the  legislature  at  Springfield,  unless  the  present  law  is 
adequate,  permitting  the  City  to  introduce  our  plan. 

Second.  Then  the  City  would  have  to  adopt  it 
by  a  majority  vote  and  take  steps  for  the  proper  acqui- 
sition of  the  Road.  When  this  is  done,  the  first  work 
necessary   to   the   introduction   of   our   plan   would   be 


FUNDAMENTAL    FEATURES — FIRST    GROUP.  91 

complete.  The  City  of  Chicago  shall  have  organized 
itself  by  law  into  a  business  corporation  to  own  and 
control  its  own  industries,  and  one  of  these  industries, 
its  Street-car  lines,  shall  have  come  into  its  possession 
and  under  its  control.  We  shall  thus  secure  the  Public 
Ownership  of  the  plant. 

2. 

Second  Fundamental  Feature — the  Subscription  or 
the  Needed  Capital,  Individually,  by  the  Whole  people. 

The  crucial  question  concerning  every  form  of  co- 
operative ownership  proposed  is — How  shall  we  raise  the 
required  capital?  The  answer  given  to  this  question 
determines  the  character  of  every  new  scheme  which 
we  seek  to  introduce, — whether  it  shall  be  communistic 
or  individualistic,  and  whether  it  shall  meet  all  our  eco- 
nomic needs  or  not.  How  then,  we  ask,  shall  we  raise 
the  needed  capital  in  our  plan  of  reform? 

In  our  plan,  we  shall  raise  the  needed  capital  just 
as  in  the  private  business  corporation. 

In  the  private  corporation  we  require  each  member 
of  it  to  subscribe  his  quota.  We  say  to  each  man, — "If 
you  expect  to  be  a  member  of  this  corporation  and  reap 
your  share  of  its  dividends  you  must  bear  your  share  of 
its  burdens.  Responsibility  must  be  commensurate 
with  the  hope  of  reward.  You,  therefore,  must  sub- 
scribe your  quota  of  the  capital,  bear  your  share  of  the 
responsibility  and  stand  or  fall  with  the  rest." 

We  shall  adopt  the  same  law  in  the  Public  Corpora- 
tion which  we  shall  form  and  we  shall  call  upon  and,  if 
need  be,  require  each  citizen,  by  law,  to  subscribe,  pay 


92  EFFECTIVE    INDUSTRIAL    REFORM. 

in  and  own  his  quota  of  the  needed  capital  and  thereby 
become  a  sovereign  responsible  factor  in  the  Corpora- 
tion. Just  as  we  tax  the  people,  individually,  to  cap- 
italize our  schools  and  other  public  works, — for  this 
is  what  we  do  when  we  tax  the  citizens  for  public  school 
buildings  and  other  public  utilities, — so,  I  would  tax 
each  man,  individually,  to  capitalize  our  public  indus- 
tries. But  the  money  thus  raised  shall  not  be  a  mere  tax, 
but  a  required  subscription  of  capital.  And  the  capital 
which  each  man  shall  thus  subscribe  shall  be  credited 
to  him  as  so  much  capital  invested  by  him  in  his  coun- 
try's industries  and  owned  by  himself.  While,  there- 
fore, we  shall  have  the  collective  ownership  of  the  plant, 
we  shall  nevertheless  have  the  individual  subscription 
and  ownership  of  the  capital. 

When,  in  the  introduction  of  this  scheme  of  reform, 
certain  citizens  are  unable  to  pay  in  at  once  their  quota, 
the  government  shall  let  them  pay  down  what  they  can 
as,  say  five  or  ten  dollars,  or  more.  Then  the  govern- 
ment shall  give  its  bond  for  the  rest,  or  pay  it  in  cash 
from  the  Public  Bank, — which  we  shall  institute, — and 
then  allow  each  citizen  to  make  up  his  deficit  in  weekly 
or  monthly  installments  as  he  is  able. 

After  this  plan  is  fully  introduced,  the  government 
could  reserve  from  each  man's  weekly  or  monthly 
wages,  a  sufficient  amount  to  make  up  by  the  end  of  the 
year  his  full  required  annual  subscription.  All  such 
installments  to  be  credited,  of  course,  to  each  man  as 
so  much  capital  invested.  „Thus  the  capital  shall  be 
subscribed  individually  by  the  whole  people.  Each 
man's  duty  to  subscribe  shall  be  equally  enforced  and 


FUNDAMENTAL    FEATURES FIRST    GROUP.  93 

each  man's  right  to  invest  and  earn  dividends  shall  be 
equally  protected. 

To  illustrate  this  method  of  raising  the  capital,  let 
us  suppose  that  Chicago  has  acquired  public  ownership 
of  its  Street-car  lines  after  our  plan  and  contemplates 
the  raising  of  the  capital,  how  shall  it  proceed? 

The  amount  needed  to  capitalize  the  Chicago  roads 
free  from  water,  is  say,  $30,000,000.  Exclusive  of 
paupers,  there  are  in  round  numbers,  say,  300,000 
voters  in  the  city  all  of  whom  are  able  to  subscribe 
something  toward  the  capitalization  of  the  roads.  Here 
we  may  remark  that  we  would  allow  women  to  subscribe 
if  they  choose. 

In  order  to  raise  the  needed  capital  all  at  once,  the 
sum  of  $100  per  capita  would  be  required.  Now  we 
would  call  upon  every  man  to  subscribe  that  amount. 
And  if  each  man  was  able  to  pay  in  this  amount  the 
whole  capital  would  be  raised  and  each  citizen  would 
have  his  $100  invested  in  the  business. 

But  doubtlessly  owing  to  poverty,  caused  chiefly  by 
present  conditions,  many  even  worthy  people  could  not 
pay  down  all  at  once  even  that  sum.  How  then  would 
we  proceed.  In  that  case,  the  government  need  not 
call  upon  each  man  to  pay  in  his  whole  subscription 
at  once,  but  only  such  part  of  it  as  he  is  able.  Then 
let  the  government  pay  the  remainder,  or  give  its  bond 
for  it  and  then  allow  each  man  to  pay  up  his  deficit  as 
he  is  able. 

Thus,  doubtlessly,  a  group  of  50,000  citizens  could 
pay  down  $10.  Another  group  of  50,000,  $20.  Another 
similar   group,    $30.      Another,     $40.       Another,     $80. 


94 


EFFECTIVE    INDUSTRIAL    REFORM. 


And  still  another,  $100, — making  all  together,  $14,000,- 
000.  Then  let  the  government  give  its  bond  for  $16,- 
000,000,  or  let  this  amount  be  subscribed  by  individuals 
through  the  Public  Bank,  and  the  roads  have  come  fully 
into  the  possession  of  the  people  as  the  following  table 
will  show: — 

50,000  pay  $10  down  making  $    500,000 


50,000  ' 

'   20  " 

1,000,000 

50,000  ' 

'   30  " 

1,500,000 

50,000  ' 

'   40  " 

2,000,000 

50,000  ' 

'   80  " 

4,000,000 

50,000  ' 

'  100  " 

5,000,000 

300,000  pay  all  together  $14,000,000 

Government  gives  its  bond  for, 

or  Public  Bank  subscribes,  $16,000,000 


Whole  amount $30,000,000 

Thus  the  roads  would  come  at  once  into  the  hands 
of  the  public  corporation.  And,  when,  by  means  of 
monthly  installments,  each  citizen  shall  have  paid  in 
his  full  quota,  the  whole  capital  shall  be  raised.  Each 
man  shall  have  subscribed  and  shall  own  his  $100,  and 
shall  be  a  sovereign  capitalistic  factor  in  the  public 
Business  Corporation  into  which  the  people  have  formed 
themselves  by  law. 

There  are  evidently  numberless  modifications  of  this 
plan  of  raising  the  needed  capital. 

Such  is  our  method  of  raising  the  capital  at  the  in- 
troduction of  our  plan.  But  when  the  plan  is  once 
fully  introduced  and  each  citizen  has  become  an  em- 


(Suggested  Subscription  Blank  filled  by  John  Brown,  who  is  able 
to  pay  down  only  a  part  of  the  full  quota.) 

Chicago,  III.,  June  1,  1909. 
THE  INDUSTRIAL  DEPARTMENT. 

CHICAGO  STREET  CAR  LINES. 

To  Mr.  $oAn    Sfivoam 

Statement , — 

Aggregate  Capital  required $30,000,000 

No.  of  Voters 300,000 

Maximum  stock  for  each  voter $100 

Minimum  dividends  guaranteed 5% 

(and  as  much  more  as  the  Roads  can  pay) 
Minimum  subscription  required  from  you,  June  1,  1910. 
(proportionate  to  income) 


Penalty  for  non-payment,  opportunity  to  invest  forfeited 
for  one  year,  or  wages  or  property  attached. 

SUBSCRIPTION. 
I  hereby  subscribe £S0 towards    Capitaliz- 


ing the  Chicago  Street  car  lines,  to  be  paid  on  or  before 
Jan.  1,  1910. 

/  promise  to   pay $5 in    monthly    install- 
ments  until   my   full   quota    ($100)    is   paid. 

I  desire  to  subscribe*  $ toward   the   Indus- 
trial Bond,  if  such  Bond\  is  needed. 
(The  Bonds  receive  the  same  dividends  as  the  subscribed  capital) 


Signed $o/in   SSrcum. 


*If  need  be,  the  government  can  require  the  people  to  subscribe  towards  its 
Bonds  proportionately  to  their  income.  My  plan  goes  on  the  principle  that  it 
is  the  duty  of  the  people  to  capitalize  their  own  industries,  and  the  govern- 
ment has  the  power  to  enforce  the  duty.  When  the  people  have  subscribed 
the  needed  capital,  they  are  privilged  to  make  as  large  a  dividend  as  they  are 
able;  but  they  must  subscribe  the  needed  capital. 

tStock  investments  are  for  life,  if  desired;  Bonds  for  only  so  long  as  the  Ad- 
ministration may  need  them. 


(Suggested  Subscription  Blank  filled  by  John  Smith,  who  is  able  to 
subscribe  more  than  the  full  quota  for  each.) 

Chicago,  III.,  June  1,  1909. 

THE  INDUSTRIAL  DEPARTMENT. 

CHICAGO  STREET  CAR  LINES. 

To   Mr JoAn   £/Lid 

Statement, — 

Aggregate  Capital  required $30,000,000 

No.  of  Voters 300,000 

Maximum  stock  for  each  voter $100 

Minimum  dividends  guaranteed 5% 

(and  as  much  more  as  the  Roads  can  pay) 
Minimum  subcription  required  from  you,  June  1,   1910. 
(proportionate  to  income) 


Penalty  for  non-payment,    opportunity  to  invest  forfeited 
for  one  year,  or  wages  or  property  attached. 

SUBSCRIPTION . 

I  hereby  subscribe. -$4flC- towards  Capitaliz- 
ing the  Chicago  Street  car  lines,  to  be  paid  on  or  before 
Jan.  1,  1910. 

I  promise  to  pay  $ in  monthly  install- 
ments until  my  full  quota  is  paid. 

I  desire  to  subscribe ^SO towardthe Indus- 
trial Bond,  if  such  is  needed. 

Signed $oAn   £/mid. 


FUNDAMENTAL    FEATURES — FIRST    GROUP.  95 

ployee  of  the  public  corporation,  the  government  could 
reserve  from  each  man's  wages  or  salary,  weekly  or 
monthly,  a  sum  sufficient  to  make  up  his  full  annual 
quota  of  the  needed  capital.  These  amounts  would, 
of  course,  be  immediately  credited  to  him  as  so  much 
capital  invested,  and  on  these  amounts  he  would  at 
once  begin  to  earn  dividends,  as  we  shall  see. 

And  every  industrious  man  will  be  able  to  pay  in 
his  full  quota.  For  when  our  plan  is  fully  inaugurated, 
labor  shall  be  so  much  better  trained  than  now  and  the 
wages  of  the  lowest  shall  be  so  elevated,  that,  however 
great  be  the  weekly  or  monthly  quota  required  from 
each,  every  man  will  be  able  to  pay  in  his  full  amount 
and  still  have,  I  believe,  an  income  double  what  such 
men  receive  to-day. 

And  this  capital  which  he  shall  thus  pay  in,  will 
not  be  a  mere  tax,  swallowed  up  in  the  general  fund. 
It  will  continue  to  be  his  private  property,  just  the 
same  as  if  he  had  subscribed  it  in  a  private  corporation 
or  invested  it  in  his  own  business.  And  on  it  he  is  to 
earn  dividends.  And  when  he  reaches  forty-five  years 
of  age,  his  dividends  will  be  sufficient  to  support  him 
the  rest  of  his  days  without  work  if  he  should  so  choose. 
But  this  brings  us  to  the  consideration  of  the  next  great 
feature  of  our  plan. 

3. 

Third  Fundamental  Feature  of  Our  Scheme. — The 
Payment  of  Dividends.  In  our  plan,  we  shall  pay  divi- 
dends to  each  investor  to  the  full  earning  capacity  of 
the  plant  concerned,  guaranteeing  a  minimum  dividend 
of,  say,  5%. 


96  EFFECTIVE    INDUSTRIAL    REFORM. 

In  this  important  feature,  our  plan  differs  essential- 
ly from  Marxian  socialism  and,  indeed,  from  every  other 
form  of  public  ownership. 

As  I  have  already  intimated,  every  industrial  sys- 
tem, in  order  to  meet  the  demands  of  humanity,  must 
seek  to  do  three  things, —  • 

First,  to  supply  all  with  productive  labor  at  just  wages. 

Second,  to  supply  the  community  with  all  needed 
commodities  at  a  fair  price. 

Third,  to  provide  a  place  where  the  people  can  in- 
vest their  savings  and  earn  a  just  dividend.  And 
this  last  function  must  in  no  case  be  omitted.  It  is 
the  function  that  crowns  and  perfects  the  other  two. 

Now  our  plan  will  aim  to  perform, — and,  inevitably, 
it  will  perform,  far  more  perfectly  than  the  present  sys- 
tem, all  three  of  the  above  functions, — and  the  last 
as  emphatically  as  either  of  the  other  two.  Hence,  in 
our  plan,  we  shall  pay  dividends  on  all  the  capital  in- 
vested. And  since  the  subscription  of  this  capital  is 
required,  we  shall  guarantee  to  each  man  a  dividend 
of  at  least  5%,  and  as  much  more  as  by  careful  man- 
agement and  skillful  labor,  we  can  make  the  plant  pay. 
And  this  rule  would  apply  not  only  to  the  fourteen 
millions  which  the  people  have  individually  subscribed, 
but  also  to  the  sixteen  millions  for  which  the  govern- 
ment would  give  its  bond,  or  which  the  Public  Bank 
would  subscribe.  (See  Appendix  IV.)  What  would 
this  mean  in  the  case  of  the  Chicago  street  car  lines? 

It  would  mean,  in  the  first  place,  that  every  investor 
would  be  sure  of  a  dividend  of  at  least  5%  on  his  in- 
vestment.    And  this  would  be  a  better  dividend  than 


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FUNDAMENTAL    FEATURES FIRST    GROUP.  97 

he  could  earn  in  the  savings  bank.  He  would  be  sure 
of  this  dividend  and  his  capital  would  also  be  absolutely 
safe,  for  the  government  would  be  behind  both.  The 
whole  wealth  of  the  city  would  be  surety  for  both  prin- 
ciple and  dividend. 

And  the  Corporation  could  easily  pay  this  5%  divi- 
dend. For,  if  necessary,  after  all  economies  were  made, 
it  would  be  perfectly  legitimate  for  the  Corporation  to 
increase  the  fare.  For  every  legitimate  business  has 
the  right  to  raise  the  price  of  its  commodities  so  as  to 
pay  a  dividend  on  the  actual  capital  of  at  least  5%. 

But  each  investor  would  do  much  better  than  this. 
For  he  would  be  allowed  to  receive  as  great  a  dividend 
as  he  and  his  fellow  investors  could  make  the  plant 
earn.  What  would  this  mean  in  the  case  of  the  Chi- 
cago street  railway? 

The  Chicago  street  railways,  I  have  been  informed, 
earn,  on  the  actual  capital  invested,  free  from  water, 
43%.  Now  if  public  ownership  were  adopted  it  might 
be  thought  best  to  increase  wages  and  pay  less  divi- 
dends. But  let  us  suppose  that  wages  are  satisfac- 
tory and  that  the  roads  continue  to  pay,  say,  40%, 
what  would  that  mean  to  each  investor  under  our 
plan? 

It  would  mean  that  under  our  plan,  each  investor 
would  receive  not  only  the  guaranteed  dividend  of  5%. 
but  a  surplus  dividend  of  35%.  And  this  would  mean 
that  under  our  scheme  each  man  with  only  $10  invested 
in  the  street  railway,  would  receive  in  dividends,  at 
the  end  of  the  very  first  year,  $4.  And  when  he  and  all 
the  others  had  paid  in  their  full  $100  as  required,  each 


98  EFFECTIVE    INDUSTRIAL    REFORM. 

would  receive  a  dividend  of  $40, — a  very  nice  little 
sum  to  earn  on  only  $100  invested. 

In  this  illustrative  example,  I  do  not  wish  to  be 
understood  as  implying  that  if  the  people  would  adopt 
public  ownership  after  our  plan  that  they  would  always 
earn  40%  on  the  actual  capital  invested.  The  secrecy 
which  business  men  resolutely  maintain  regarding 
their  business  to-day  makes  it  impossible  to  learn 
what  are  their  profits  on  the  actual  capital.  It  may 
be  that,  as  some  pessimistic  minds  say,  we  could  not 
earn  more  than  ten  per  cent,  or  eight,  or  even  six  per 
cent.  And  yet,  I  cannot  but  ask, — If  this  is  all  that 
present  capitalists  make  on  their  money  invested,  how 
does  it  come  about  that  they  all  so  speedily  become 
millionaires?  If  they  do  not  make  money  in  the  form 
of  dividends,  then  they  make  it  through  graft.  But  in 
either  case  the  results  are  the  sarne.  The  business 
earns  an  immense  profit.  And  I  cannot  escape  the 
conviction  that  if  the  people  had  public  ownership 
after  our  plan,  they  could  make  a  good  large  dividend, 
say  from  10%  to  20%  and  still  pay  good  wages  and 
ask  low  prices.  But  suppose  that  the  people  could 
not  earn  more  than  eight  or  even  six  per  cent.,  that 
would  be  far  better  than  the  present  system  which  pays 
them  only  ?>}4°/o  or  4%  in  a  Savings  bank. 

But  whatever  be  the  possible  earnings  of  the  Rail- 
ways or  of  any  other  industry,  the  point  which  I  am 
making  now  is  that  in  every  case,  whatever  be  the  in- 
dustry concerned,  under  our  plan  each  man's  invest- 
ment, though  required  of  him,  is  his  own  private  capital 
and  on  it  he  is  to  earn  dividends  to  the  full    paying 


FUNDAMENTAL    FEATURES — EIRST   GROUP.  99 

capacity  of  the  plant  municipalized.  And  thus  the 
whole  earnings  of  our  industrial  life,  above  the  cost  of 
wages  and  salaries,  shall  be  paid  back  to  the  people, 
and  not  as  now  into  the  pockets  of  the  Few  alone. 

But  suppose  that  after  we  have  introduced  every 
economy  and  done  our  best,  a  certain  business  simply 
does  not  earn  a  net  5%  dividend  as  the  law  requires, 
what  then?  In  that  case,  we  shall  raise  the  price,  as 
we  have  already  implied,  on  the  commodity  produced. 
If  the  plan  concerned  be  a  railway,  we  shall  simply 
raise  the  fare  high  enough  to  give  us  at  least  a  5%  divi- 
dend. To  do  this  would  be  perfectly  right;  for  every 
plant  ought  to  pay,  at  least,  a  5%  dividend  on  the 
capital  invested. 

But  suppose  that  even  after  raising  the  price,  we 
fail  to  make,  in  the  introduction  of  our  plan,  our  5% 
dividend,  what  shall  we  do?  In  that  case,  we  shall 
vote  either  to  tax  the  wealth  of  the  country  to  make 
up  the  deficit  or  to  close  up  the  plant  and  go  out  of 
that  particular  business. 


Fourth  Fundamental  Feature. — This  People's  Busi- 
ness Corporation  shall  gradually  acquire  and  collectively 
own,  every  plant,  every  utility,  which  the  welfare  or 
profit  of  the  whole  people  may  demand.  And  we  shall 
constantly  enlarge  our  business  and  thereby  increase  the 
opportunities  of  the  people  to  invest  and  acquire  wealth- 

The  purpose  of  the  re-organization  of  our  industries, 
as  this  plan  contemplates,  is  to  make  money,  to  produce 
and  acquire  wealth  for  the  whole  people,  with  efficiency 


100  EFFECTIVE    INDUSTRIAL    REFORM. 

and  with  justice  toward  all.  This  earth  was  not  de- 
signed to  exist  for  the  benefit  of  the  few  alone.  Its  re- 
sources belong  to  all.  Hence,  when  our  plan  is  intro- 
duced, wherever  there  is  a  dollar  to  be  made  for  the 
benefit  of  the  whole  people,  there  we  shall  go  and  ac- 
quire possession. 

Of  course,  in  the  introduction  of  our  scheme,  we 
must  proceed  cautiously  and  gradually.  We  ought  to 
acquire  possession,  at  first,  of  those  monopolies  with 
which  the  people  are  most  familiar  and  which  afford 
the  greatest  promise  of  success.  We,  therefore,  should 
probably  begin  with  such  utilities  as  Street-car  lines, 
Electric  lights,  Telephones,  and  so  forth.  But  ultimate- 
ly we  should  acquire  possession  of  every  utility  in  which 
there  is  a  dollar  to  be  made  for  the  whole  people. 

In  the  acquisition  of  these  established  utilities  we 
would  pay  for  them  only  the  cost  of  reproduction.  We 
would  not  pay  a  dollar  for  watered  stock, — that  is  for 
water  in  the  stock. 

And  in  acquiring  possession  of  these  utilities,  there 
would  not  be  necessarily  involved  any  change  in  the 
working  force  or  present  management  of  the  road. 
There  would  be  no  cessation,  even  temporary,  of  the 
operation  of  the  utility.  There  would  be  simply  a  trans- 
fer of  the  whole  business  with  its  men  and  management 
over  to  the  People.  And,  henceforth,  the  Directors  in 
control  would  be  elected  by  the  people  and  be  responsi- 
ble to  the  people,  instead  of  as  now  to  the  despotic 
Few.  And,  henceforth,  the  profits  would  flow,  not  into 
the  pockets  of  the  few  alone,  but  into  the  pockets  of  all 
the  people. 


FUNDAMENTAL    FEATURES FIRST    GROUP.  101 

By  thus  expanding  our  business  and  entering  upon 
new  enterprises,  we  shall  provide  a  place  for  the  invest- 
ment of  the  ever  increasing  savings  of  the  people. 

We  shall  institute,  as  we  have  implied,  a  Public 
Bank  in  connection  with  the  Industrial  Department. 
To  this  we  shall  invite  all  the  people  to  bring  their 
savings.  And  then  by  enlarging  our  plants,  and  tak- 
ing up  new  enterprises,  we  believe  that  all  the  increas- 
ing savings  of  the  people  can  easily  find  investment 
and  earn  large  dividends. 

See  how  the  trusts  are  to-day  expanding  their  indus- 
tries and  not  only  increasing  the  demand  for  capital 
but  multiplying  the  productive  power  of  capital  many 
times  over.  Why  cannot  the  people  collectively  do  the 
same?  They  certainly  can  and  they  certainly  shall. 
Here  is  a  Gas  trust.  It  begins  with  the  manufacture 
of  gas  alone.  But  after  awhile  it  adds  to  this  the 
manufacture  of  gas-fixtures  and  other  supplies.  Then  it 
goes  into  gas  ranges,  and,  in  short,  into  all  that  belongs 
to  the  use  of  gas  whether  for  lighting,  warming  or  cook- 
ing purposes. 

Why  cannot  the  people  do  the  same?  Suppose  that 
we  had  public  ownership  of  the  street-car  lines.  Why 
could  we  not,  in  time,  add  to  that  business  the  work  of 
manufacturing  cars  and  to  this,  the  manufacturing  of 
rails  and  all  railroad  supplies  ?  And  this  is  what  we  shall 
do.  We  shall  add  in  dustry  toindustry,  plant  to  plant, 
utilizing  all  the  inventive  skill  of  the  country,  until  all 
our  capital  is  invested  and  is  earning  good  dividends. 

What  would  this  mean  ?  Even  if  the  wealth  of  the 
country  was  not  increased,  it  would  mean  that,  each  in- 


102  EFFECTIVE    INDUSTRIAL    REFORM. 

dustrious  man  could  acquire  from  $10,000  to  $12,000  by 
the  time  that  he  was  forty-five  years  of  age;  and  on  this, 
he  could  be  earning  a  dividend  of  at  least  10%.  In  other 
words,  each  family  could  be  receiving  an  income  from 
$1,000  to  $1,200  a  year,  over  and  above  the  daily  wages 
of  the  husband  and  father,  and  this  would  mean  inde- 
pendence. It  would  mean  the  abolition  of  poverty  so 
far  as  poverty  is  the  result  of  industrial  wrong.  It 
would  mean  that  wives  and  mothers  would  no  longer 
be  compelled  to  work  in  the  factory  and  on  the  farm. 
They  could  remain  at  home  with  their  children  and  all 
those  evils  recounted  in  a  preceding  Chapter  would  be 
abolished.  These  affirmations  are  no  invention  of  the 
imagination.  They  shall  be  substantiated  in  a  succeed- 
ing Chapter. 

And  under  this  new  plan,  our  capital  and  dividends 
shall  be  safe.  The  whole  country  shall  stand  behind 
them.  There  will  be  no  possibility  of  one  man's  rob- 
bing another.  The  embezzeler  shall  be  hunted  from 
the  earth.  And  that  eternal  vigilence  which  now  ab- 
sorbs all  our  energies  and  makes  life  a  burden,  will  be 
unnecessary.  Thus  our  bread  shall  be  certain  and  our 
waters  secure.  And  we  shall  be  able  to  lay  the  head 
upon  the  pillow  at  night  without  that  haunting  fear 
that  some  one  will  do  us  while  we  sleep.  And  when 
that  energy  which  is  now  wasted  in  protecting  ourselves 
against  each  other's  insidious  attacks,  is  directed  into 
productive  channels,  how  greatly  shall  our  wealth  be 
increased  ? 

And  it  is  right  here  that  our  plan  differs  from  all 
other  schemes   of   public   ownership  which   have   been 


FUNDAMENTAL    FEATURES FIRST    GROUP.  103 

proposed.  And  it  is  here  that  the  attractiveness  and 
justification  of  our  scheme  lies.  For  all  other  schemes 
generally  promise  good  occupations  with  good  wages 
and  good  commodities  at  a  fair  price.  That  is  all. 
They  destroy,  as  I  have  said,  all  possibility  of  investing 
savings  for  the  earning  of  dividends,  and  all  use  of  the 
public  corporations  for  the  acquisition  of  individual 
wealth  and  gain.  Such  schemes  are  communistic  in 
character  and  are  not  attractive  to  more  substantial 
minds.  Neither  are  they  adequate.  For  one  of  the 
chief  objects  for  which  men  go  into  business  is  to  be 
able  to  invest  their  savings  and  earn  dividends.  This 
is  the  chief  end  of  the  private  corporation.  It  ought, 
therefore,  to  be  the  chief  end  of  the  public  corpora- 
tion. For  the  very  object  for  which  we  go  into  the 
public  corporation  is  to  make  our  industrial  activi- 
ties achieve  all  industrial-economic  functions,  as  in 
the  private  corporation,  and  achieve  them  in  a  far 
better  way  than  the  private  corporation.  Hence,  in 
the  public  corporation,  we  must  make  it  one  of  the 
functions  of  capital  to  earn  dividends  and  to  earn  far 
better  dividends  than  the  private  corporation.  And  if, 
by  wise  management,  our  Industries  can  be  made  to 
pay  10%,  or  20%  or  even  50% — in  short,  whatever  in 
this  wonderful  age  of  inventive  skill,  capital  can  be 
made  to  earn, — that  shall  be  paid  to  each  investor  on 
his  actual  capital  invested.  And  when  we  shall  have 
correlated  and  integrated  our  industries  into  one  great 
whole,  who  can  tell  what  shall  be  the  individual  wealth 
that  each  can  accumulate  under  the  operation  of  this 
new  plan  ?    There  never  was  a  time  when  the  earnings  of 


104  EFFECTIVE    INDUSTRIAL    REFORM. 

labor  and  capital  were  so  great  as  to-day.  Under  this 
new  method,  all  this  wealth  and  gain  will  flow  back 
into  the  pockets  of  the  people  and  not  as  now  into  the 
pockets  of  the  few  alone  at  the  top. 

6. 

I  have  now  unfolded  the  first  four  fundamental 
features  of  what  I  believe  to  be  the  true  method  of 
effective  industrial  reform.  Before  passing  on  to  other 
features  of  this  plan,  let  us  make  a  few  important  ob- 
servations regarding  the  features  just  unfolded. 

The  peculiar  character  of  our  plan  lies  in  that  we 
shall  constitute  the  people  into  a  single  business  cor- 
poration; and  while  we  shall  secure  the  collective 
ownership  of  the  plant,  yet  we  shall  require  the  whole 
people  individually  to  subscribe  the  needed  capital, 
and  on  this  we  shall  pay  dividends  equal  to  the  full 
earning  capacity  of  the  plant.  We  shall  thus  make 
the  People's  Corporation  subordinate  to  the  acquisition 
of  individual  wealth. 

Our  reasons  for  raising  the  capital  in  this  way  are 
several. 

First.  We  raise  the  capital  in  this  way  in  order 
to  individualize  responsibility,  place  it  where  it  properly 
belongs,  and  necessitate  each  man's  bearing  his  share 
of  the  burden,  if  he  is  to  reap  his  share  of  the  reward. 

The  great  danger  connected  with  every  form  of  co- 
operative effort,  is  the  ease  with  which  it  enables  some 
men  to  shirk  responsibility  and  reap  the  fruits  of  others 
toil.  When  ten  men  pull  a  coach  together  it  is  easy 
for  one  or  two  not  to  pull  at  all  and  yet  receive  full  pay. 
Now  our  plan  will  prevent  all  this.     For  we  shall  call 


FUNDAMENTAL    FEATURES FIRST    GROUP.  105 

upon  each  man  individually  to  subscribe  his  quota  of 
the  required  capital.  And  if  he  will  not  subscribe,  he 
will  receive  no  dividends.  "  No  capital  subscribed,  no 
dividends  received," — will  be  our  law. 

And  we  shall  thus  place  the  responsibility  of  raising 
the  needed  capital  where  it  properly  belongs, — namely 
upon  the  individual.  Men  are  crying  out, — and  justly 
crying  out, — today  for  equal  opportunity  in  the  acquisi- 
tion of  wealth.  But  if  we  are  to  have  equal  opportunity 
in  the  acquisition  of  wealth,  we  must  have  equal  re- 
sponsibility in  bearing  the  burden  of  its  production. 
If  men  desire  to  earn  good  wages,  they  must  be  willing 
to  perform  their  share  of  efficient  labor;  and  if  they 
desire  to  reap  their  quota  of  the  dividends  accruing 
from  the  business  corporation,  they  must  subscribe  also 
their  quota  of  the  needed  capital.  And  again  we  say — 
"  No  capital  subscribed,  no  dividends  received."  Hence, 
we  shall  call  upon,  and  if  need  be,  require  each  man  to 
subscribe  and  own  his  proper  quota  of  the  invested  capital. 

Again.  We  raise  the  capital,  in  this  way,  because 
in  no  other  way  can  we  create  the  sense  of  honest 
acquisition.  Many  people  seem  to  have  a  vague  feel- 
ing that  public  ownership  is  a  method  by  which  the 
people  can,  in  some  way,  come  into  possession  of  vast 
utilities,  without  paying  anything  for  them.  But  the 
only  way  by  which  any  man  can  become  morally  a 
part  owner  in  his  country's  industries  is  by  stepping 
up  like  a  man  and  paying  in,  directly  or  indirectly,  his 
share  of  the  needed  capital.  No  mere  act  of  law  can 
make  any  man  rightfully  a  share-holder  in  our  great 
utilities.     It  is  the  man's  actually  paying  for  what  he 


106  EFFECTIVE    INDUSTRIAL    REFORM. 

receives  that  makes  him,  by  right,  a  share-holder  in 
the  wealth  of  the  country.  Now  the  only  way  by 
which  we  can  be  sure  that  each  man  pays  for  what  he 
receives  is  by  requiring  each  to  come  up  and  pay  in 
his  full  quota  directly.  And  when  a  man  has  done  this, 
he  will  feel  that  he  really  owns  what  he  owns,  and  that 
he  has  paid  for  it  himself,  and  has  not  filched  it  out  of 
some  body  else. 

And  this  method  will  create,  in  the  minds  of  all,  a 
healthy  conviction  that  no  enterprise  can  be  under- 
taken without  the  people's  raising  the  capital.  Under 
the  ordinary  methods  of  public  ownership,  thousands 
of  men  will  vote  for  the  public  acquisition  of  any  utility 
under  the  .sun  without  one  thought  as  to  where  the 
money  is  to  come  from.  But  if  we  require  each  man 
to  subscribe  individually  his  quota,  no  man  will  vote 
for  any  utility  without  first  asking  himself  whether  he 
and  the  rest  of  the  people  are  able  to  put  their  hands 
into  their  pockets  and  subscribe  the  needed  capital. 

We  shall  thus  evoke  that  caution  that  is  necessary 
to  deter  the  people  from  engaging  in  foolish  and  waste- 
ful enterprises. 

We  raise  the  capital  in  this  way  because  it  will  keep 
the  whole  people  alert  to  elect  the  best  men  to  the  board 
of  directors  and  hold  them  to  efficient  service.  It 
will  make  graft  and  corruption  impossible.  For  no 
men  are  so  alert  in  looking  after  a  business  as  those  who 
have  their  capital  invested  and  their  dividends  at  stake. 
Now  in  our  plan  every  voter  will  have  his  own  capital 
invested  and  his  own  dividends  at  stake.  He  will 
therefore,  see  to  it  that  the  best  men  are  elected  to 


FUNDAMENTAL    FEATURES — FIRST    GROUP.  107 

office    and   that   graft    and    corruption    are    abolished. 

We  adopt  this  method  of  raising  the  capital  in  order 
to  develop  independence  of  character  and  enable  the 
people  to  prove  their  full  ability  to  manage  their  own 
affairs. 

The  constant  taunt  of  those  who  desire  to  perpetuate 
present  conditions  is  that  the  people  can  never  manage 
their  own  industrial  interests.  "They  are  incompetent 
for  it."  Now  it  is  time  for  the  people  to  repudiate 
and  disprove  this  taunt  with  scorn.  And  the  way  to 
do  this  is  by  showing  to  the  world  that  they  can  take 
care  of  themselves  and  can  manage  their  own  utilities. 
Now  it  is  our  purpose  to  give  the  people  the  opportunity 
to  do  this  by  throwing  upon  the  whole  people  individu- 
ally the  responsibility  of  subscribing  the  needed  capital. 
And  I  have  no  fears  as  to  the  result. 

Finally  and  chiefly,  we  adopt  this  method  of  raising 
the  capital  in  order  to  make  the  people's  corporation, 
which  we  shall  create,  subordinate  to  the  acquisition 
of  individual  wealth,  and  because  it  will  make  each  fami- 
ly financially  independent  by  middle  life. 

While  it  is  most  important  to  secure  co-operation 
in  the  production  of  wealth,  yet  we  must  also 
secure  individualization  in  its  distribution.  The  social, 
industrial,  organization  must  be  subordinate  to  the  in- 
dividual's need.  Now  this  is  what  we  shall  achieve 
in  our  plan.  For  while  we  shall  have  the  collective 
ownership  of  the  plant  on  the  part  of  the  whole  com- 
munity, yet  each  man  shall  subscribe  and  own  his 
quota  of  the  capital,  just  as  in  the  private  corporation. 
And  on  this  capital,  he  shall  earn  and  receive  dividends 


108  EFFECTIVE    INDUSTRIAL    REFORM. 

to  the  full  earning  capacity  of  the  plant.  And  this 
capital  will  be  his  own,  to  convert  into  an  annunity 
or  leave  to  his  heirs,  or  utilize  in  other  ways,  as  in  the 
private  corporation.  Thus,  the  people's  corporation, 
which  we  contemplate,  will  become  the  agent  of  the 
whole  people  in  the  acquisition  of  individual  wealth. 
And,  as  I  have  said,  it  will  lift  every  industrious  man 
and  family  into  financial  independence  by  middle  life 
and  it  will  make  poverty,  resulting  from  industrial 
wrongs,  a  thing  of  the  past. 

We  shall  now  proceed,  in  the  next  Chapter,  to  unfold 
other  fundamental  features  in  our  plan  of  reform. 

Note. 

Mr.  Carnegie  advocates*  organizing  employers  and  employees 
in  one  corporation  to  own  and  control  each  plant. 

He  quotes  with  favor  John  Stuart  Mill — 

"The  form  of  association,  however  *  *  which  must  in  the 
end  predominate,  is  not  that  which  can  exist  between  capitalist 
as  chief  and  working  people  without  a  voice  in  the  management, 
but  the  association  of  the  laborers  themselves  in  terms  of  equality, 
collectively  owning  the  capital  with  which  they  carry  on  their 
operations,  and  working  under  managers  elected  and  removable  by 
themselves."     (Mill's  Political  Economy,  People's  Edition,  p.  645.) 

If  Carnegie  will  advocate  associating  employer,  employee  and 
consumer — in  short  the  whole  community — in  one  Business  Cor- 
poration, by  law,  to  own  and  manage  their  own  industries,  he  will 
be  advocating  my  plan. 

*See  "Problems  of  To-day,"  p.  66,  by  Andrew  Carnegie. 


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The  last  century  saw  our  Industries  consolidated  into  one  whole. 
This  was  a  most  important  step  in  our  Industrial  evolution. 

But  in  achieving  this  consolidation,  the  Industrial  organizer 
concentrated  all  power  into  his  own  hands,  and  made  himself  the 
people's  autocrat. 

The  next  step  consists  in  the  transfer  of  this  supreme  power 
from  the  Industrial  organizer  into  the  hands  of  the  people  by 
making  them  the  Business  Corporation  by  law. 

When  this  is  done,  our  Industrial  evolution  shall  be  complete. 


CHAPTER  VII. 

FUNDAMENTAL  FEATURES— SECOND   GROUP. 

This  plan  of  reform,  like  every  other,  has  its  prob- 
lems.    These  problems  relate  chiefly  to  administration. 

Among  them  are, — How  shall  we  secure  justice  in  relation 
to  wages  and  salaries, — how  shall  we  elect  our  board  of 
directors, — how  prevent  injustice  from  creeping  in  and 
how  prevent  a  return  of  despotic  power, — and  other 
problems.  These  problems  of  administration  cause  an- 
other group  of  fundamental  features  to  arise  which  we 
shall  now  take  up. 

1. 

Fifth  Fundamental  Feature  of  the  new  Plan  of  Reform. 
— We  shall  secure  justice  in  relation  to  Wages  and 
Salaries,  by  having  them  fixed  rationally  according  to 
justice  by  a  Board  of  Commissioners,  chosen  annually 
by  the  people,  to  that  end.  This  Board  shall  fix  the 
relative  wages  and  salaries  to  be  received  by  workmen 
and  officers  during  the  year.  We  shall  also  have  an 
Arbitration  Committee  in  each  shop  to  settle  disputes 
as  to  justice  in  individual  cases  between  workers  and 
superintendent. 

Thus,  we  shall  give  every  man,  indirectly,  a  voice  in 
saying  what  justice  demands.  The  voice  of  the  whole 
people,  in  short,  shall  determine  what  the  relative  com- 
pensation of  the  different  callings  shall  be.  And  justice 
shall  be  done.  For  this  Board  of  Commissioners  shall 
represent  not  a  small,  despotic  clique,  but  the  whole 
people.  And  the  aim  shall  be,  not  to  find  the  men, 
who  driven  by  poverty,  will  work  for  the  lowest  wage, 


110  EFFECTIVE    INDUSTRIAL    REFORM. 

but  what  each  occupation  ought  in  justice  to  receive, 
and,  then,  to  find  the  best  man  for  the  occupation. 
Thus  there  will  be  competition;  but  it  will  be  competi- 
tion not  in  the  ability  to  live  cheap  and  work  for  less 
than  one  is  worth,  but  in  skill  and  capacity  to  do  the 
work.  Such  competition  will  not  tend  to  the  rapid 
degradation  but  the  highest  elevation  of  the  working 
man.  We  shall  also  distinguish  between  the  expert,  the 
good,  and  the  poor  workman;  and  fix  wages  accordingly. 
This  will  inspire  every  man  to  do  his  best. 

2. 

Sixth  Fundamental  Feature, — The  Election  of  Direc- 
tors.— We  shall  achieve  the  most  efficient  administra- 
tion of  each  plant  by  throwing  the  responsibility  of 
electing  the  Directors  or  Superintendent  as  the  case 
may  be,  directly  upon  the  actual  investors, — and  there- 
fore, upon  the  whole  people — giving  each  his  due  voting 
power. 

In  no  case,  shall  we  turn  the  appointment  of  the 
directors  over  to  the  government.  No  private  cor- 
poration would  think  of  doing  such  a  thing.  And  why 
should  we?  The  proper  persons  to  elect  the  directors 
of  a  business  are  those  most  vitally  interested  in  the 
success  of  the  business — those  whose  capital  is  invested 
and  whose  dividends  are  at  stake.  But  in  the  Public 
Corporation  which  we  contemplate  this  would  mean  the 
whole  people,  except  paupers  and  a  few  other  shiftless 
and  drunken  persons. 

Shall  we  give  each  citizen  just  one  vote,  or  more 
according  to  amount  invested?  Experience  alone  can 
settle  this  detail.     We  might  give  each  man  one  vote 


FUNDAMENTAL  FEATURES SECOND  GROUP.    Ill 

and  an  additional  vote  for  every  $2000  invested  by 
him — no  one  to  have  more  than  five  additional  votes. 
In  the  introduction  of  our  plan,  when  the  maximum 
investment  is  only  $100,  we  might  grant  an  additional 
vote  for  each  $20  invested,  and  increase  this  standard 
proportionately  as  the  maximum  investment  increased. 

But,  whatever  rule  we  shall  finally  make  in  relation  to 
this  matter,  the  point  to  be  noticed  here  is  that  the  direc- 
tors are  to  be  elected  by  the  direct  vote  of  the  inves- 
tors. And  since  the  investors  will  have  their  capital 
and  dividends  at  stake,  each  man  will  be  led  to  vote 
only  for  the  best  man.  Furthermore,  I  would  make  it 
a  law,  that  no  man  should  be  a  candidate  for  the  office 
of  directorate  in  any  business  unless  he  could  show  a 
certificate  of  adequate  educational  training  in  our 
schools  of  Technology  and  Business,  and  had  served  suc- 
cessfully for  a  term  of  years  in  lower  industrial  or  com- 
mercial positions.  Thus  the  very  best  management  will 
be  elected,  and  the  most  efficient  administration  secured. 

3. 

Seventh  Fundamental  Feature. — We  shall  pay  each 
man's  capital  back,  dollar  for  dollar,  in  cash,  to  his 
heirs  at  his  death;  or,  he  may  at  his  option,  convert  it 
at  any  period  during  his  life  into  an  annuity  to  be  paid 
to  himself  (or  wife  or  child)  until  death.  Thus  every 
man  shall  receive  back  every  dollar  that  he  invests. 

To  illustrate.  Suppose  that  a  man  has  reached 
forty-five,  and  is  possessed  of  $12,000.  Now  he  can 
do  one  of  two  things.  He  can  either  continue  to  re- 
ceive his  ordinary  dividends  and  at  death  let  his  money 
go  to  his  heirs;   or,  if  he  prefers,  he  can  convert  it  into 


112  EFFECTIVE    INDUSTRIAL    REFORM. 

an  annuity,  to  be  paid  to  himself  during  the  rest  of  his 
life.  Or,  he  may  divide  it  into  two  parts  and  buy  an 
annuity  for  himself  with  one  part,  and  an  annuity  for 
his  wife  with  the  other  part.  Or  if  he  prefers  he  may 
invest  a  part  of  it  in  an  annuity  for  a  crippled  child. 

But  while  each  man's  capital  shall  thus  go  back  to 
himself,  or  his  heirs  at  his  death,  yet  the  stock  for  which 
his  money  was  paid  shall  go  back  to  be  redistributed 
among  the  incoming  generation  as  the  next  feature  of 
our  plan  will  explain. 

4. 

Eighth  Fundamental  Feature. — The  members  of  each 
new  generation  shall  be  listed  in  the  order  of  their  ages. 
And  each  one,  as  he  comes  of  age,  or  reaches,  say, 
the  age  of  twenty,  shall  be  required  to  subscribe  his 
quota  of  the  capital  like  the  generation  preceeding  him. 
The  members  of  the  incoming  generation  shall  thus 
become  in  turn  responsible  sovereign  factors  in  the 
business  corporation,  and  take  the  place  of  those  going 
out  through  the  gate  of  death. 

After  this  plan  is  fully  introduced,  the  government 
could  reserve  from  each  man's  weekly  or  monthly 
wages  or  salary  a  sum  sufficient  to  make  up  his  required 
quota  at  the  end  of  the  year, — all  such  amounts  to  be 
credited,  of  course,  to  his  account  as  so  much  capital 
invested  by  him  in  his  country's  industries. 

While  the  members  of  each  generation  shall  thus  come 
and  go,  each  in  turn  becoming  a  sovereign,  responsible 
agent  in  the  industrial  and  commercial  life  of  the 
country,  yet  the  capital  shall  ever  remain  the  same,  un- 
disturbed by  the  coming  and  going  of  generations. 


CHAPTER  VIII. 

RULES   GOVERNING   INVESTMENTS. 

Ninth  Fundamental  Feature  of  Our  Plan. — We  shall 
secure  justice  and  fair-play  in  the  opportunity  to  invest 
and  earn  dividends,  by  appropriate  laws  made  by  the 
sovereign  will  of  the  people. 

There  are  those  who  say  that  it  will  be  very  easy 
to  have  justice  at  the  beginning  of  this  new  plan,  but 
when  it  gets  established,  the  old  evils  will  gradually 
creep  in.  A  few  men  will  find  ways  of  acquiring  control. 
The  strong  will  get  their  money  in  and  the  many  will  be 
crowded  out.  There  will  be  stock-gambling  and  water- 
ing of  stocks,  and  all  the  other  evils  which  exist  to-day. 

But  I  am  persuaded  that  this  pessimistic  view  is 
entirely  incorrect.  For  by  the  very  structure  of  the 
public  corporation  as  we  have  outlined  it,  aided  by  a 
few  simple  Rules  governing  Investments,  all  specula- 
tion in  stocks,  all  watering  of  stocks,  all  stock-gambling, 
and  all  crowding  out  of  the  weak  by  the  strong  shall 
be  impossible. 

To  explain,  and  specify  how  this  will  be. 

(I).  No  buying  and  selling  of  stocks  between  man 
and  man  shall  be  allowed  whatsoever.  Each  man  shall 
subscribe  his  quota  and  that  shall  be  the  end  of  the 
matter.  If  he  is  unable  to  subscribe  his  full  quota, 
the  Public  bank  shall  subscribe  it  in  his  place.  But  no 
individual  citizen  shall  come  into  possession  of  it. 

(II).  Stocks  shall  always  be  exactly  at  par.  There 
will  consequently  be  no  watering  of  stocks,  no  deprecia- 
tion and  no  premiums.     And,  therefore,  there   will   be 


114  EFFECTIVE    INDUSTRIAL    REFORM. 

no  gambling  in  stocks  whatsoever.  Every  man  will  be 
credited  with  every  dollar  that  he  puts  in  and  debited 
with  every  dollar  that  he  takes  out.  And  every  dollar 
that  he  has  invested  will  go  to  himself  in  the  form  of 
an  annuity  or  to  his  heirs  in  the  form  of  cash. 

(III).  We  shall  have  all  the  citizens  listed  in  the 
order  of  their  ages,  and  we  shall  keep  open  every  man's 
opportunity   to   invest  equally  with  every  other  man. 

The  chief  danger  to  be  guarded  against  in  any  plan 
of  reform  is  the  crowding  out  of  the  weaker  by  the 
stronger  and  more  thrifty,  in  the  matter  of  investments. 
But  this  shall  be  utterly  impossible  under  our  plan. 

For  under  our  plan  we  shall  have  two  classes  or 
methods  of  investments.  First,  subscriptions  of  stock, 
directly  in  the  public  Industries;  Second,  subscrip- 
tions or  Investments  in  the  Public  Bank.  Now  in 
order  to  protect  each  man's  right  to  invest  equally 
with  every  other,  we  shall  have  the  citizens  listed  ac- 
cording to  age,  and  no  person  shall  be  permitted  to 
subscribe  or  own  directly  of  the  public  stocks  more  than 
the  maximum  average  quota, — which  shall  be  deter- 
mined by  a  commission  chosen  by  the  people.  The 
commission  on  wages  and  salaries  might  be  also  the  com- 
mission on  Maximum  investment. 

The  present  wealth  of  the  country  being  what  it 
is,  the  maximum  stock  allowed  to  each  man  in  justice 
to  the  rest  would  be  about  $400  a  year  or  about  $10,000 
when  he  was  forty-five  or  older.  Hence  we  would 
make  it  a  rule  that  no  man  would  be  allowed  to  invest 
directly  in  the  public  stock  more  than  this  maximum 
amount,  until  the  wealth  of  the  country  was  increased. 


RULES    GOVERNING     INVESTMENTS.  115 

The  wealth  of  the  country,  however,  is  rapidly  increas- 
ing and,  hence,  this  maximum  amount  allowed,  would 
rapidly  increase  also. 

But  some  one  asks, — Could  not  a  wealthy  person  go 
and  buy  stocks  from  another  in  the  streets  and  so  come 
into  possession  of  more  than  his  share?     No,  for  there 
would  be  no  buying  and  selling  of  stocks  in  the  streets 
or   anywhere   else  between  man   and   man,    permitted. 
All  the  people  in  the  community,  being  listed  in  the 
order  of  their  ages,  as  the  members  of  the  new  genera- 
tion come  of  age,  they  shall,  as  we  have  said,  come  up 
and  subscribe   their  due   amount   and  no  more.     And 
this  they  will  do  from  year  to  year  and  that  will  be  the 
end  of  the  matter.     But  will  not  the  law  of  inheritance 
interfere  with  this  law  of  distribution  and  bring  to  some 
persons  more  than  their  share?       No,  for  when  a  man 
shall  die,  his  capital  shall  be  paid  in  cash  to  his  heirs, 
but  the  stock  will  go  to  the  new  generation  of  investors. 
But  how  about  the  difference  in  dividends  earned  by 
different    plants, — will    not    this    create    injustice    and 
trouble?     No,  for  the  dividends  of  all  the  utilities  of 
each  community  and  ultimately  of  the  United  States 
shall  be  pooled.     And  the  percentage  paid  to  each  man 
will  be  the  average  percentage  or  dividends  earned  by 
all  the  utilities  of  the  community.     Thus  it  will  be  im- 
possible for  any  one  to  come  into  possession  of  more 
than  his  due  proportion  of  the  public  stock.     And  since 
stocks  will  always  be  kept  exactly  at  par,  it  follows 
from  the  preceeding  rules  that  all  watering  of  stock, 
or  speculation  in  stock,   or  gambling  in  stock,  will  be 
forever  impossible. 


116  EFFECTIVE    INDUSTRIAL    REFORM. 

But  suppose  that  a  man  is  unable  to  subscribe  his 
full  quota,  will  that  not  necessitate  his  stock's  going  to 
someone  else,  and  will  he  not  thereby  lose  his  oppor- 
tunity to  invest  his  full  quota?  No,  for  in.case  a  person 
does  not  or  cannot  subscribe  his  full  quota,  his  stock 
shall  not  go  to  any  private  investor.  On  the  contrary, 
it  shall  be  taken  up  by  the  public  Bank;  and  the  man 
shall  be  allowed  to  pay  for  it  gradually  until  his  whole 
quota  has  come  into  his  possession.  Of  course,  the 
dividends  of  that  portion  of  his  stock  held  by  the  bank 
shall  go  to  the  depositors  until  it  is  paid. 

The  same  rule  shall  apply  to  men  who  are  intempe- 
rate and  thriftless.  Their  quota  unsubscribed,  shall 
be  taken  and  held  by  the  public  bank.  And  when  they 
shall  reform  their  ways  and  come  with  their  money  to  the 
bank,  their  stock  shall  be  re-assigned  to  them.  The 
same  course  will  be  pursued,  when  a  man  shall  with- 
draw a  portion  of  his  investment  from  the  stocks  of  his 
country.  For  we  shall  allow  a  man  at  any  time  to 
withdraw  his  capital,  providing  there  is  money  in  the 
bank  sufficient  to  supply  his  place.  But  when  a  man 
shall  so  withdraw  his  capital,  it  will  be  the  public  bank 
that  will  hold  his  stock.  And  when  he  shall  return 
and  desire  to  regain  his  stock,  he  shall  be  able  to  do  so 
by  paying  in  its  par  value.  Thus  every  man's  oppor- 
tunity to  invest  in  the  stocks  of  his  country's  industries 
shall  be  fully  protected. 

(IV).  We  shall  authorize  the  Public  Bank  which 
we  shall  establish  to  receive  and  invest,  in  addition  to 
the  direct  stock  subscribed,  all  the  surplus  savings  of 
the  people  as  opportunity  shall  offer. 


RULES    GOVERNING    INVESTMENTS.  117 

In  our  attempt  by  the  preceding  rule  to  protect  the 
weak  against  being  crowded  out  by  the  strong  there  is 
danger  of    wronging  the  strong  and    more  competent. 
For  there  are  men  who  are  more  capable  and  thrifty 
than   others.     These   will   save  more   than   others   and 
desire  to  invest  more  than  the  maximum  quota.     And 
it  will  be  right  for  them  to  invest  all  that  they  can 
legitimately   save,    providing   they   do    not    crowd   out 
others.     How  shall  their  rights  be  protected?     We  will 
protect  their  rights  by  means  of  the  Public  Bank  which 
shall  be  an  organic  feature  of  our  plan.     For  we  shall 
establish  such  a  Public  Bank;    and  we  shall  invite  all, 
who  desire,  to  deposit  their  surplus  savings  with  this 
Bank.     And  then  the  community  can  so  add  to,  and 
enlarge  the  industrial  and  commercial  enterprises  of  the 
country  as  to  afford, — as  we  intimated  in  a  preceding 
page, — a  place  where  all  the  surplus  savings  of  the  people 
can  be  invested  and  made  to  earn  dividends  equally 
with  the  other  capital  of  the  country.     The  only  differ- 
ence between  investing  money  by  direct  subscription  of 
stock  and  by  depositing  it  in  the  Public  Bank  will  be 
that  in  the  former  case  the  money  will  be  invested  perm- 
anently for  life  (unless  the  investor  himself  should  desire 
to  draw  it  out),  while  in  the  latter  case  the  money  shall 
be   invested   for   life   only    on   condition    and   in   such 
amounts  as  the  business  of  the  country  and  the  rights  of 
other  investors  shall  warrant.     But  with  that  enterprise 
which  marks  the  people  of  the  United  States,  I  believe 
that  it  would  be  easy  so  to  enlarge  our  business  as  to 
keep  all  this  surplus  money  fully  invested.     The  larger 
part  of  it  could  be  kept  earning  dividends  equal  with 


118  EFFECTIVE    INDUSTRIAL    REFORM. 

the  invested  stocks  of  the  country   and  every  dollar 
could  be  made  to  earn  something. 

Thus  while  protecting  every  man's  right  to  invest 
equally  with  every  other,  we  shall  not  deprive  the 
more  competent  of  the  opportunity  to  get  all  their  sur- 
plus savings  invested  also.     And  so  justice  shall  be  done. 

6. 

(V).  The  requirement  to  invest  shall  not  be  made 
oppressive  nor  be  unjustly  enforced. 

Our  grounds  for  making  the  investment  of  the 
capital  compulsory,  if  need  be,  are  first,  because  if  the 
people  are  to  form  themselves  successfully  into  a  busi- 
ness corporation  to  own  their  own  utilities,  they  must 
be  able  to  command  the  capital  when  needed.  Secondly, 
because  it  is  good  for  the  individual  to  feel,  a  little,  the 
spur  of  compulsion  in  the  matter  and  so  make  him  more 
certain  to  invest  for  his  own  good.  Thirdly,  by  making 
the  subscription  of  stock  compulsory  we  shall  prevent 
any  man's  getting  up  a  faction  to  thwart  the  people  in 
this  plan  of  reform. 

But  this  exaction  of  capital  shall  not  be  unjust  nor 
oppressive. 

(1).  For  we  shall  require  from  different  men  not 
necessarily  the  "same  amount  down  but  a  sum  propor- 
tionate to  the  income  and  ability  of  each  to  subscribe. 
Suppose  for  example  that  there  was  a  man  who  for  some 
reason  simply  could  not,  even  when  given  time,  pay  the 
required  quota  needed  of  him  to  capitalize  the  Chicago 
Street-car  roads,  what  would  we  do?  We  simply  would 
not  require  it  of  him.     But  how  would  the  deficit  in 


.£   S 


Note. 

Long  distance  transmission  of  power  by  means  of  electricity, 
gives  almost  every  water-fall  immense  value. 

In  the  future,  in  all  except  the  prairie  country,  transportation, 
travel,  lighting,  manufacturing,  even  the  routine  duties  of  the 
housewife,  will  be  done  by  electricity  from  water-power. 

After  the  first  cost  of  building  the  dams  and  equipping  them 
with  electric  dynamos,  the  expenses  will  be  small  and  the  profits 
immense. 

Mr.  Smith,  commissioner  of  Corporations,  says  that  an  embryonic 
water-power  trust,  headed  by  the  General  Electric  and  Westing- 
house  companies,  is  rapidly  seizing  possession  for  a  mere. song  of 
all  the  water-power  of  the  country. 

See  World's  Work,  June  1909,  p.  11638  and  especially  McClure's 
Magazine,  May  1909 — "The  National  Water-Power  Trust,"  by 
J.  C.  Welliver. 


RULES    GOVERNING    INVESTMENTS.  119 

his  case  and  others  like  him  be  made  up?  It  would  be 
made  up  by  the  public  Bank,  and,  if  need  be,  by  a  call 
for  money  sufficient  to  make  up  the  required  amount. 

(2).  We  would  not  require  any  man  to  subscribe 
after  a  certain  age  was  reached. 

The  question  is  asked,  for  how  long  shall  a  man 
be  required  to  invest  in  his  country's  industries?  Shall 
it  be  as  long  as  he  lives?  And  what  is  the  aggregate 
quota  that  he  will  be  called  upon  to  invest  year 
by  year? 

It  is  evident  that  since  the  wealth  of  our  country  is 
limited,  there  is  a  limit  to  the  aggregate  quota  which 
each  man  has  a  right  to  subscribe  and  ought  to  sub- 
scribe. And  there  should  be  a  definite  sum  that  a  man 
shall  be  called  upon  to  invest  year  by  year.  Further, 
when  a  man  has  subscribed  his  aggregate  quota,  and 
has  enough  to  support  himself  the  rest  of  his  days,  he 
should  not  be  required  to  continue  to  subscribe  down 
to  the  end  of  life.  What  rule,  then,  regarding  this 
matter  shall  we  make  ? 

It  is  evident  that  a  man  ought  to  have  his  full 
quota  subscribed  by  the  time  that  he  is,  say,  forty-five. 
We  shall,  therefore,  make  it  a  law,  when  our  system  is 
established,  that  no  man  shall  be  required  to  subscribe 
in  his  country's  industries  after  he  reaches  forty-five 
years  of  age  or  after  his  full  quota  is  subscribed. 

But  how  much  shall  we  require  each  man  to  sub- 
scribe year  by  year  before  that  time?  It  is  evident 
that  a  young  man  should  subscribe  year  by  year  an 
amount  sufficient  to  make  up  the  aggregate  quota  due 
from   him   when   he   is   forty-five   years   of   age.     The 


120  EFFECTIVE    INDUSTRIAL    REFORM. 

present  wealth  of  the  country  remaining  what  it  is, 
the  aggregate  quota  due  from  every  man  when  he  is 
forty-five  is  about  $10,000.  (See  Appendix  III.)  In 
order  to  reach  this  amount  at  forty-five,  each  man 
should  subscribe  on  the  average  $400  a  year.  This, 
therefore,  is  the  amount  that  each  man  would  have 
the  right  to  subscribe  and  which  the  government  shall 
call  upon  him  to  subscribe  year  by  year,  when  our  plan 
is  fully  inaugurated. 

But  when  a  man  had  reached  his  $10,000  limit, 
would  the  government  still  allow  him  to  invest,  if  he 
so  desired?  Certainly  it  would,  providing  all  below 
him  had  invested  their  full  quota  or  all  they  desired  and 
there  was  still  more  capital  required.  But  as  I  have 
said,  he  would  be  required  to  bring  his  money  to  the 
Public  Bank  and  invest  it  through  that  as  he  had  op- 
portunity. 

To  explain.  It  is  evident  that  all  young  men  on 
arriving  at  21  years,  would  be  allowed  to  invest  and 
would  be  called  upon  to  invest  $400, — and  to  keep 
investing  $400  a  year  until  their  full  aggregate  quota 
was  reached.  This  would  mean  that  all  young  men  at, 
say,  30  years  would  have  the  right  to  have  in  $4000. 
All  at  40,  would  have  the  right  to  have  in  $8000.  And 
all  at  45,  to  have  in  $10,000.  Now,  if,  after  all  the 
younger  men  have  subscribed,  their  full  quota,  accord- 
ing to  age,  there  should  be  still  more  capital  needed,  the 
older  men  or  those  having  in  the  full  aggregate  quota  of 
$10,000  would  be  permitted  to  invest  still  more,  pro- 
portionately to  the  surplus  capital  needed.  In  other 
words,  the  only  limit  that  we  shall  put  to  any  man's 


RULES    GOVERNING    INVESTMENTS.  121 

investing,  is  the  limit  of  the  aggregate  capital  needed 
and  the  rights  of  his  fellowmen  to  an  equal  chance 
with  himself.  It  is  evident  that  as  the  wealth  of  the 
country  increases,— (and  it  is  increasing  with  great 
rapidity),  the  aggregate  quota  of  each  will  be  increased 
and  the  quota  required  from  each,  year  by  year, 
will  also  be  increased. 

And  in  any  case  a  man  can  bring  his  surplus  savings 
to  the  Public  Bank  to  be  invested  as  opportunity 
affords.  And  in  an  energetic  community,  I  believe 
that  there  will  always  be  new  enterprises  demanding 
capital  and  making  it  possible  to  keep  all  the  surplus 
savings  of  the  people  invested. 

(3).  We  shall  allow  men  to  withdraw  their  money 
with  such  restrictions  only  as  the  good  of  the  public 
and  the  individual  may  demand. 

A  question  which  occurs  to  most  minds  when  they 
consider  this  new  scheme  of  reform  for  the  first  time 
is:  When  a  man  has  invested  his  quota  will  he  be 
obliged  to  keep  it  in  forever,  that  is,  until  death,  or 
will  he  be  allowed  on  certain  conditions  to  withdraw  it? 

Our  scheme  of  reform  goes,  indeed,  on  the  theory 
that  each  man  is  to  build  himself  as  a  permanent  or- 
ganic factor  into  his  country's  industries,  by  subscrib- 
ing his  quota  of  the  aggregate  capital,  and  keeping  it 
subscribed  as  long  as  life  shall  last.  It  views  his  capi- 
tal and  his  place  in  the  industrial  system,  like  his  place 
in  the  political  system,  as  something  sacred  and  inaliena- 
ble. Hence,  our  plan  excludes  all  speculation  in  stocks ( 
and  all  possibility  of  speculation  either  within  or  with- 
out the  industrial  office.     Stocks  are,  as  we  have  said, 


122  EFFECTIVE    INDUSTRIAL    REFORM. 

to  be  always  at  par;  every  man  is  to  invest  in  his  turn 
and  in  his  proper  quota;  and  hence,  every  man  is 
expected  to  stay  in  as  a  permanent  organic  factor  in 
his  country's  industrial  activities. 

And  yet  a  certain  degree  of  liberty  in  this  matter 
perhaps  ought  to  be  allowed.  Men  may  hesitate  to 
adopt  a  scheme  of  reform,  if,  when  they  put  their 
money  in,  there  is  absolutely  no  possibility,  under  any 
condition,  of  getting  it  out. 

We  shall,  therefore,  grant  the  following  privileges 
in  this  matter  of  Investments. 

First,  When  a  citizen  shall  remove  his  residence 
permanently  from  a  certain  community, — city,  state  or 
nation, —  he  shall  be  allowed  to  withdraw  his  stock 
from  the  local  industries  providing  there  is  some  one 
else,  especially  a  resident  citizen,  ready  to  take  his 
place,  or  providing  there  is  money  in  the  Public  Bank 
sufficient  to  take  his  stock.  Under  our  plan  our  indus- 
tries shall  be  classified  into  Local,  State,  National, 
and  International.  Local  industries  shall  be  those  in- 
dustries confined  to  a  local  community,  as  those  of  a 
city.  Now  it  is  evident  that  a  citizen  ought  to  have 
the  right  to  remove  his  place  of  residence  from  one  city 
to  another,  if  he  so  desires.  It  is  also  evident  that  he 
should  not  be  compelled  to  keep  his  capital  invested 
in  the  city  which  he  has  left,  if  he  should  desire,  say, 
to  get  it  invested  in  the  new  community  or  state  to 
which  he  has  come.  Whenever,  therefore,  a  citizen 
shall  permanently  remove  his  place  of  residence  to  a 
new  city,  he  shall  be  allowed  to  withdraw  his  capital 
from   the   Local  industries   of  the   place,   providing  of 


RULES    GOVERNING    INVESTMENTS.  123 

course,  there  is  some  one  else,  some  new  resident,  wil- 
ling to  buy,  or  providing  the  public  Bank  is  able  to  take 
his  stock.  This  privilege  shall  be  granted  in  justice 
to  each  citizen. 

Second.  Whenever  a  citizen  shall  permanently 
remove  his  residence  to  a  new  community, — in  city, 
state,  or  nation, — the  community  from  which  he  goes, 
may  if  it  chooses,  compel  him  to  withdraw  his  capital 
invested  in  its  local  industries  that  those  who  remain 
may  take  his  place.  This  law  should  be  made  in  jus- 
tice to  each  community  and  to  those  who  remain. 

Third.  We  would  recommend  that  each  commun- 
ity fix  upon  a  certain  minimum  sum  or  proportional 
part  of  each  man's  quota,  which  he  should  be  required 
to  keep  invested,  and  then  allow  each  to  offer  all  be- 
yond that  to  the  Public  Bank,  if  at  any  time  he  should 
so  desire.  How  great  this  minimum  amount  should  be, 
we  leave  to  each  city,  state,  or  nation,  to  decide  for 
itself.  Experience  must  be  the  final  teacher  in  this 
matter.  Some  may  argue  that  the  liberty  of  with- 
drawing on  removing  one's  residence,  is  all  that  any 
one  needs.  "If  a  man  does  not  desire  to  invest  in  the 
industries  of  a  locality,  let  him  withdraw  his  residence, 
and  take  his  capital  with  him.  But  if  he  will  remain 
in  a  place,  let  him  subscribe  his  full  quota  of  its  needed 
capital  and  bear  his  share  of  its  burdens  and  reap  his 
share  of  its  rewards."  And  yet  there  may  be  condi- 
tions when  a  man  ought  to  be  allowed  to  withdraw 
all,  or  at  least,  a  part  of  his  quota, — as  when  a  young 
man  should  desire  to  use  his  capital  in  finishing  a  col- 
lege education,  or  when  a  man  had  met  with  a  severe 


124  EFFECTIVE    INDUSTRIAL    REFORM. 

accident,  or  when  a  man  has  reached  extreme  old  age 
and  needs  for  a  time  to  draw  on  his  capital.  All  these 
cases  should  be  considered  and  provided  for. 

But  the  chief  ground  for  granting  this  privilege  of 
withdrawing  at  least  a  portion  of  one's  capital  stock 
providing  the  funds  or  deposits  in  the  public  Bank 
would  permit  it,  is  that  men  love  liberty;  and  though 
few,  I  am  convinced,  would  care  to  use  the  privilege  to 
any  great  extent,  yet  men  will  feel  easier,  if  they  know 
that  they  can  withdraw  their  capital  at  any  time  should 
they  so  desire.  Many  persons  might  refuse,  indeed,  to 
vote  for  the  new  scheme  unless  this  privilege  was  al- 
lowed. And  I  believe  that  while  a  very  few  ne'er-do- 
wells  might  abuse  the  privilege,  yet  each  man's  self- 
interest  and  other  influences,  would  all  tend  to  cause 
each  one  to  keep  in  his  full  quota  and  so  make  and  keep 
himself  a  full  organic  factor  in  his  country's  industrial  life. 

But  by  whom  would  this  stock  in  every  case  be 
taken?  It  would  in  every  case,  as  I  have  intimated, 
be  taken,  and  held  by  the  Public  Bank,  at  par.  And 
the  dividends  would  go  to  the  individual  investors. 
The  Public  Bank  would  hold  this  stock  in  its  posses- 
sion or  care,  until  the  man  who  sold  it  desired  to  buy 
it  back,  or  until  his  death;  in  which  event  it  would  be 
redistributed  among  the  living. 

The  object  of  having  the  Public  Bank  thus  in  every 
case  take  the  stock,  when  men  desire  to  withdraw, 
would  be  chiefly,  in  order  to  preserve  for  each  man  the 
opportunity  to  buy  his  stock  back  should  he,  at  some 
future  time,  desire  to  do  so.  If  his  stock  was  given  to 
some  private  individual,  this  would  make  it  impossible, 


RULES    GOVERNING    INVESTMENTS.  125 

without  some  most  complex  arrangement,  to  plan  so 
that  he  could  ever  get  it  back.  On  selling  his  stock, 
therefore,  to  some  private  individual  his  opportunity 
to  invest  that  portion  of  his  savings  would  be  gone 
forever.  But  if  the  Public  Bank  should  hold  his  stock, 
then  he  could  at  any  time  buy  it  back  at  par  and  so 
recover  his  opportunity  to  invest. 

Thus  in  every  case,  when  any  man,  through  im- 
providence or  drunkenness  or  misfortune  or  ill  health 
should  fail  to  make  his  investment  at  the  proper  time, 
we  shall  make  it  a  law  for  the  Public  Bank  to  make  it 
for  him  so  that,  if  at  any  time,  the  man  should  reform, 
or  recover  his  health  and  desire  to  recover  the  oppor- 
tunity lost,  he  could  do  so. 

This  law  would  also  prevent,  absolutely,  every  per- 
son from  getting  possession  of  more  than  his  proper 
quota  of  the  stock  in  his  proper  time. 

By  this  provision  it  would  be  possible  also  for  any 
man  at  any  time  to  get  his  money  out  of  the  Public 
corporation,  if  he  should  so  desire,  and  yet  he  would 
not  lose  the  opportunity  of  putting  it  back  in  again, 
later  if  he  should  desire  to  do  so.  And  the  use  of  this 
privilege  would  in  no  wise  endanger  the  object  for 
which  our  scheme  of  reform  is  adopted.  For  no  per- 
son could,  by  the  exploitation  of  this  privilege,  ever 
get  possession  of  more  than  his  share  of  the  stock. 

The  only  possible  evil  that  could  come  from  granting 
the  privilege  to  withdraw  one's  stock  would  be  the  pos- 
sibility that  the  ne'er-do-wells  would  abuse  it  to  their 
own  harm,  that  is  to  the  loss  of  their  opportunity  to 
invest  and  obtain  a  support  for  old  age.     Whether,  for 


126  EFFECTIVE    INDUSTRIAL    REFORM. 

the  sake  of  these  ne'er-do-wells,  we  should  never  allow 
any  person  to  withdraw  his  stock,  experience  alone  can 
determine. 

(VI).  Finally,  these  rules  can  be  modified  or 
amended  at  any  time  by  the  people  as  justice  may 
demand.  It  is  impossible  before  a  system  has  been 
put  to  the  test  to  provide  for  every  contingency.  And 
certain  rules  adopted  beforehand  may  prove  to  be  im- 
perfect. The  framers  of  the  constitution  of  the  United 
States  did  not  provide  for  everything  with  the  first 
draft  of  that  document.  To  provide  for  all  imperfec- 
tions, they  gave  the  people  the  power  to  amend.-  We 
shall  have  the  same  power  in  forming  our  industrial 
constitution.  If,  at  any  time,  we  find  that  new  rules 
are  needed  or  that  the  old  are  imperfect,  amendments 
can  be  made  and  so  justice  be  done.  But  such  amend- 
ments shall  become  law  only  when  adopted  by  the 
majority  referendum  vote  of  the  people. 

I  have  now  unfolded  the  chief  laws  governing  In- 
vestments. Reviewing  these  laws  the  following  af- 
firmations can  be  made. 

First.  The  right  of  each  man  to  invest  equally 
with  every  other  shall  be  absolutely  secure.  There 
will  be  no  possibility  of  any  one's  taking  it  from  him. 
The  only  person  who,  under  our  plan,  can  injure  any 
man,  will  be  the  man  himself.  If  a  man  will  drink,  or 
will  be  lazy — if  a  man  simply  will  not  work  and  will 
not  invest, — then  the  Industrial  Board  will  be  obliged 
to  allow  his  capital  to  be  subscribed  by  the  Public 
Bank  and  allow  his  dividends  to  go  to  the  depositors. 
But  it  will  be  the  man  himself  and  no  one  else  who  will 


Copyrighted  by  Underwood  and  Underwood,  N.  Y. 

The  New  York  Stock  Exchange  (1909). 

Office  of  J.  P.  Morgan  on  Corner  at  left. 


Note. 
The  New  York  Stock  Exchange. 

In  the  past  decade  the  average  annual  sale  of  shares  in  the 
New  York  Stock  Exchange  have  involved  an  annual  turn  over  of 
nearly  $15,000,000,000;  and  Bond  transactions  have  averaged 
about  $800,000,000. 

But  only  a  small  part  of  these  sales  were  of  an  investment 
character;   the  larger  part  was  virtual  gambling.* 

When  my  scheme  is  established  the  Stock  Exchange  and  kin- 
dred institutions,  as  the  Produce  Exchange,  will  disappear. 

*See  Report  of  Mr.  Hughes'  Committee  on  Speculations  in  Se- 
curities and  Commodities.     June  7,  1909. 


RULES    GOVERNING    INVESTMENTS.  127 

deprive  him  of  his  right  in  the  matter.  Furthermore, 
our  plan  will  allow  the  man  to  repent,  reform,  and 
recover  his  stock  if  he  will. 

Second.  Our  plan  will  abolish  all  speculation  in 
stocks,  all  watering  of  stocks,  and  all  stock-gambling 
of  every  kind  whatsoever.  Hence,  every  man's  Capi- 
tal shall  be  absolutely  safe, — as  safe  as  the  wealth  of 
the  whole  country  can  make  it;  for  the  wealth  of  the 
whole  country  will  be  behind  it.  His  dividends  shall 
be  safe  and  equal  to  every  one  else's;  that  is,  he  will 
reap  the  same  percentage  on  his  capital  as  any  one  else. 
And  his  capital  shall  be  invested  permanently;  it  shall 
be  in  for  life,  unless  he  should  be  so  foolish  as  to  draw 
it  out  himself, — should  the  state  permit  it. 

Third.  Our  plan,  by  encouraging  enterprise,  will 
so  enlarge  the  business  of  the  country  as  to  provide  a 
place  for  the  investment  of  all  the  savings  of  the  people, 
and  it  will  enable  each  citizen  to  build  himself  right  up 
into  the  industrial  life  of  the  country  and  become  a 
sovereign  responsible  factor  there.  It  will  constitute 
each  community  into  a  great  industrial  and  commercial 
democracy  with  the  rights  of  all  adequately  protected. 

Finally,  we  see  that  under  our  plan  the  stock  and 
produce  exchange  and  all  similar  institutions,  with  all 
their  evil  speculation  and  gambling,  will  be  abolished 
forever.  The  Public  Bank  will  take  their  place  in  all 
legitimate  exchange  of  stocks. 


Works  of  the  General  Electric 
The  General  Electric  Company,  like  many  other  large  corpora- 
tions, has  an  "Inventions  Department."  It  embraces  the  fifty 
engineers  in  the  various  departments,  one  of  whose  duties  is  to  be 
on  the  alert  for  all  possible  improvements,  each  of  which  when 
perfected  is  patented  and  owned  by  the  corporation. 

In  the  year  1907,  615  ideas,  the  products  of  the  inventive  genius 
of  300  men,  were  patented  by  the  corporation.  Thus  the  Corpora- 
tion corrals  all  useful  inventions  to  its  own  profit  (p.  37)  and  the 
defeat  of  competitiors.  See  World's  Work,  June  1905,  p.  6296- 
6298. 


Company,  Schenectady,  N.  Y. 

The  plants  of  the  General  Electric  and  Westinghouse  companies 
should  be  acquired  by  the  people,  and  with  these  we  should  equip 
our  water-falls. 

It  is  these  two  companies  that  lead  in  the  monopoly  seeking 
to  acquire  possession  of  all  water  power  sites.  (See  note  opp.  page 
119.) 

Already  many  of  the  best  water-power  sites  in  the  country 
have  been  quietly  seized  by  this  national  water  power  syndicate. 

See  "The  National  Water-Power  Trust,"  by  J.  C.  Welliver,  Mc- 
Clure's  Magazine,  May,  1909. 


CHAPTER   IX. 

FUNDAMENTAL  FEATURES— THIRD  GROUP. 

In  the  two  preceding  chapters,  I  unfolded  the  special 
features  of  organization  and  administration  in  our  plan 
by  which  to  secure  the  greatest  efficiency  and  fair-play 
in  the  industrial  and  commercial  world  under  our  new 
scheme.  But  there  is  another  important  group  of  factors 
which  we  should  notice  and  which  are  needed  to  crown 
the  whole  new  system  and  make  it  complete. 

1. 

Tenth  Fundamental  Feature  of  our  Plan. — We  shall 
make  such  needed  changes  in  the  training  of  the  young 
in  our  public  schools  as  to  fit  them  for  life's  vocations  and 
make  our  plan  of  reform  a  success.  In  short,  we  shall 
correlate  our  school  system  with  the  demands  of  in- 
dustrial   reform. 

As  I  have  implied  in  a  previous  chapter,  (p.  44) 
in  order  to  remedy  present  evils,  we  need  not  only  a 
new  industrial  system,  but  also  a  more  intelligent  and 
a  more  efficient  manhood  and  womanhood.     To  specify. 

(1)  In  order  to  perfect  our  system  of  industrial  re- 
form, we  need,  first,  a  manhood  and  womanhood, 
trained  vocationally,  that  is  trained  for  the  necessary 
callings   of   life. 

The  needs  of  human  life  have  given  rise  to  a  multi- 
tude of  distinct  vocations  or  callings,  industrial,  political, 
medical  and  religious.  Now  that  boy  or  girl  who  would 
succeed  in  life,  must  be  specially  trained  for  some  one 
of  these  vocations  and  fitted  to  fill  it  with  intelligence 
and    efficiency. 


FUNDAMENTAL     FEATURES THIRD    GROUP.  129 

Our  school  system  to-day  fails  to  do  this  work  and 
then  we  blame  the  boy  and  the  girl  for  their  incapacity 
and  lack  of  intelligence. 

Now,  in  our  plan  of  reform,  our  first  work  shall  be  to 
see  that  each  calling  is  properly  remunerated,  and,  then, 
to  see  to  it  that  each  boy  is  fitted  for  some  one  vocation, 
and  is  able  to  serve  society  with  intelligence  and  efficiency 
and  make  a  good  living  for  himself  and  family.  We  shall 
also  train  the  boys  and  the  girls  in  the  virtues  of  indi- 
vidual   and    domestic    thrift,    economy    and    frugality. 

(2)  We  shall  also  train  the  young  in  Social  econo- 
mics, or  Political  Economy,  as  it  is  called. 

We  shall  take  care  not  only  to  train  each  boy  and  girl 
in  the  laws  relating  to  the  production  of  wealth  and  the 
winning  of  an  income,  but  also  in  the  methods  by  which 
the  people  are  despoiled  by  the  industrial  baron  in  the 
present  system,  and  how  by  industrial  cooperation,  under 
law,  these  evils  can  be  averted. 

(3)  We  shall  train  the  young  morally,  that  is,  in 
the  love  of  justice  and  humanity;  the)''  shall  be  made  to 
see  the  evil  and  wickedness  of  the  predaceous  spirit 
which  now  rules  the  industrial  world,  and  to  see  the 
beauty  and  the  economic  necessity  of  justice,  coopera- 
tion and  the  square  deal  in  human  society. 

(4)  But  we  shall  not  stop  with  education.  It  shall 
be  our  resolute  policy,  to  search  out  the  causes  of  those 
fetters  of  body  and  mind  that  spring  from  an  evil  in- 
heritance. Is  it  not  a  fact  that  multitudes  of  pregnant 
mothers,  overworked  and  insufficiently  nourished,  bring 
into  the  world  children  handicapped  for  life  by  a  dulled 
intellect  and  nerveless  body?     And  how  many  children 


130  EFFECTIVE    INDUSTRIAL    REFORM. 

are  fettered  for  life  by  weaknesses  entailed  from  the 
ignorance  and  vices  of  ancestors.  Now  it  shall  be  our 
policy,  to  remove  these  evils  of  inheritance  so  far  as 
they  can  be  by  a  new  educational  system  and  a  new 
and  better  scheme  of  industrial  and  commercial  life. 
We  shall  aim,  in  short,  to  give  every  child  an  unfettered 
start  in  life,  and  then  by  a  wise  education  and  training 
make  him  equal  with  the  very  best. 

This  policy  relating  to  education  and  inheritance, 
we  shall  pursue  because  it  is  dictated  not  only  by  the 
largest  philanthropy,  but  by  the  wisest  self-interest 
also.  And  we  shall  pursue  it  as  an  essential  part  of 
our  new  industrial  scheme,  and  we  shall  demand  that 
it  be  faithfully  carried  out. 

2. 

Eleventh  Fundamental  Feature  of  our  Plan. — It  shall  be 
the  supreme  aim  and  purpose  of  this  scheme  of  reform 
to  perform  every  economic  function  with  justice,  efficiency 
and  in  subordination  to  the  welfare  of  the  whole  people. 

It  should  be  repeated  again  and  again  that  there 
are  three  important  functions  which  it  is  imperative 
for  every  industrial  system  to  perform  if  it  would  be 
adequate  to  meet  all  industrial  needs.  The  first  relates 
as  I  have  said  to  work  and  wages;  the  second  to  com- 
modities and  prices,  and  the  third,  to  opportunity  to 
invest  one's  savings,  earn  dividends  and  increase  one's 
wealth. 

Now  it  shall  be  the  pronounced  aim  of  our  scheme 
to  perform  all  three  of  these  imperative  functions  and 
to  perform  them  far  more  effectively  than  the  present 
system  and  with  justice  toward  all. 


FUNDAMENTAL    FEATURES THIRD     GROUP.  131 

First,  it  shall  be  the  law  of  the  new  plan  to  develop, 
utilize  and  organize  all  the  creative  energies  of  labor 
in  the  country,  both  of  hand  and  brain,  and  thereby, 
not  only  increase  the  power  of  the  country  to  create 
wealth,  but  also  to  supply  every  industrious  person 
with  productive,  remunerative  labor.  And  we  shall  see 
that  each  man  is  paid  a  just  wage  or  salary  proportionate 
to  his  worth. 

Second,  it  shall  be  our  law  to  provide  the  whole 
people  with  all  useful  commodities  and  all  needed  ser- 
vice at  a  just  price.  And  we  shall  not  be  governed  in 
this  matter  like  our  present  system  by  mere  motives 
of  profit  but  the  needs  of  the  whole  people.  And  people 
who  dwell  in  the  country  and  those  who  dwell  in  the  city 
will  be  supplied  as  far  as  possible  with  all  desirable  utilities. 

Third,  we  shall,  as  we  have  been  saying  all  along, 
aim  to  utilize  all  the  savings  of  the  people,  in  short, 
utilize  and  organize  all  the  energies  of  the  capital  saved 
by  the  people,  and  thereby  not  only  increase  the  coun- 
try's wealth,  but  open  the  way  for  the  investment  of 
all  the  people's  savings  to  the  advantage  of  all  and  to 
the  increase  of  individual  wealth. 

These  three  functions,  we  shall  make  it  our  law  to 
perform.  And  since  the  whole  people  shall  be  supreme, 
these  three  functions  shall  inevitably  be  carried  out. 
And  they  shall  be  carried  out  with  justice  toward  all 
and  in  subordination  to  the  welfare  of  the  whole  people. 
All  needed  laws  relating  to  the  proper  location  of  fac- 
tories, hours  of  labor,  sanitation,  child-labor,  woman's 
labor,  and  so  forth  shall  be  made  as  the  welfare  of  the 
people  shall  demand.    ' 


132  EFFECTIVE    INDUSTRIAL    REFORM. 

3. 

Twelfth  Fundamental  Feature  of  our  Plan. — This 
scheme  of  reform  shall  be  embodied  in  constitutional  law, 
and  it  shall  be  the  duty  of  certain  officials  elected  for 
the  purpose  to  see  that  the  plan  is  properly  carried  out. 

For  while  our  plan  is  not  government  ownership  as 
that  term  is  commonly  understood,  yet  it  is  a  form  of 
Public  Ownership  established  and  enforced  by  law.  It 
follows,  therefore,  that  the  whole  scheme  must  be  em- 
bodied in  constitutional  law. 

When  our  fathers  contemplated  self-government, 
they  saw  the  importance  of  a  written  constitution  em- 
bodying its  fundamental  features.  This  constitution 
they  Saw  would  serve  ever  to  hold  up  before  the  people 
the  great  principles  upon  which  their  government  was 
established;  it  would  ever  keep  them  in  the  path  along 
which  they  must  travel.  Capable  of  amendment,  it 
could  never  enslave  them,  and  yet  it  would  keep  them 
from  hasty  departure  from  the  great  principles  of  jus- 
tice and  liberty.  And  it  would  protect  the  minority 
from  despotic  measures  on  the  part  of  the  majority. 

Now  when  the  people  contemplate  constituting  the 
community  into  a  single  producing  firm  in  the  form 
of  a  vast  stock-corporation,  with  every  one  as  a  respons- 
ible agent  in  it,  when  they  contemplate  thereby  creat- 
ing their  own  utilities  and  performing  their  own  indus- 
trial functions,  with  justice  toward  all, — it  is  imperative 
that  they  embody  their  plan  in  constitutional  law,  which 
though  capable  of  amendment,  shall  hold  them  to  the 
great  principles  which  they  have  adopted,  and  protect 
every  one  in  his  industrial  rights. 


FUNDAMENTAL     FEATURES THIRD    GROUP.  133 

Now  this  is  what  we  shall  do  in  our  plan.  We  shall 
have  the  different  features  which  we  have  unfolded, 
embodied  in  forms  of  constitutional  law  and  so  made 
a  part  of  the  fundamental  law  of  the  land. 

For  the  efficient  execution  of  these  functions,  we 
shall  create  a  new  Public  Department  called  the  Indus- 
trial Department  of  Public  Service,  with  a  central  In- 
dustrial office,  including  a  Public  Bank.  But  this  new 
Department  shall  be  entirely  distinct  from  the  other 
Public  departments  and  it  shall  be  strictly  autonomous. 
The  agents  through  which  the  people  act  authorita- 
tively are  the  various  Public  Departments.  And  we 
believe  that  the  Departments  of  Public  Service  should 
be  greatly  enlarged.  But  each  department  should  be 
kept  distinct  and  autonomous.  The  department  of 
Law  and  Order  or  government  proper  should  be  kept 
distinct  from  that  of  Education;  and  the  department  of 
Industry  and  Commerce  should  be  kept  distinct  from 
both. so  that  if  all  other  departments  should  be  des- 
troyed, the  Industrial  Department  would  remain.  We 
would,  therefore,  have  the  directors  of  each  plant  elected 
directly  by  the  people  and  made  responsible  directly 
to  the  people.  They  should  not  be  bound  to  consult 
the  mayor  or  in  any  way  be  subordinate  to  him. 
The  Mayor  should  be  supreme  in  the  maintenance  of 
law  and  order;  the  Directors  should  be  supreme  in 
managing  the  business  of  the  people  and  making  it  a 
success.  Both  Mayor  and  Directors  should  be  each 
sovereign  in  his  own  sphere,  but  independent  of  each 
other,  and  autonomous,  and  both  directly  responsible 
to  the  people  whose  agents  they  are.     Of  course,  if  an 


134  EFFECTIVE    INDUSTRIAL    REFORM. 

official,  in  the  Industrial  Department,  is  guilty  of  wrong, 
he  can  be  indicted  and  tried  before  the  courts  of  law. 
But,  otherwise,  he  shall  not  be  interfered  with,  by 
government  officials. 

It  shall  be  the  duty  of  the  government,  however,  to 
perform  certain  functions. 

First  of  all,  it  shall  see  that  the  proper  Industrial 
Department  is  created  according  to  law  and  the  needed 
Public  Bank  established. 

It  shall  take  care  that  commissioners  are  appointed 
by  the  people  at  the  proper  time,  according  to  law,  for 
the  acquiring  of  public  possession  of  any  industry  as 
the  people  may  elect,  or  for  the  starting  of  a  new  in- 
dustry. And  it  shall  give  its  bonds  when  necessary  for 
the  payment  of  any  industry. 

It  shall  require  the  people  to  subscribe  the  required 
capital  for  each  new  industry,  for  which  it  shall  issue 
its  guaranteed  bonds,  at  par  value,  for  the  money  sub- 
scribed. And  in  case  of  a  deficit  it  shall  require  the 
people  to  make  up  the  deficit  according  to  law.  It 
shall  guarantee  a  minimum  dividend  of  say  5  %. 

It  shall  arrange  for  the  election  of  the  directors  of 
each  industry  by  the  qualified  subscribers  of  the  capital 
according  to  law. 

It  shall  arrange  for  the  election  of  Commissioners 
of  Wages  and  Salaries  according  to  law  and  it  shall  see 
that  Arbitration  Committees  are  appointed  for  each 
industry  as  needed. 

It  shall  see  that  the  Industrial  office  is  kept  open 
for  recording  the  names  of  subscribers  and  the  amount 
of  their  subscribed  stock;    for  effecting  exchanges  of 


FUNDAMENTAL    FEATURES THIRD    GROUP.  135 

stock  as  desired  by  individuals  and  as  permitted  by 
law;  for  receiving  from  the  directors  reports  of  their 
service  and  the  condition  of  the  business  as  required 
by  law;  and  lastly  for  paying  to  the  shareholders  the 
dividends  earned  by  the  industries  of  the  land. 

It  shall  pass  all  laws  and  regulations  necessary  to 
the  efficient  achievement  of  every  economic  function 
with  justice  toward  all,  providing  that  no  enactment 
shall  become  law  until  adopted  by  a  majority  referen- 
dum vote  of  the  people. 

By  these  rules  and  regulations  embodied  in  the  law 
of  the  land,  we  shall  reduce  all  business  to  subjection 
to  law, — to  constitutional  law,  and  thereby  secure  jus- 
tice to  all.  Our  Industrial  activities  will  thus  become 
institutionalized,  that  is,  incorporated  in  industrial 
institutions,  controlled  by  law. 

4. 

I  have  now  unfolded  the  several  features  of  what  I 
believe  to  be  the  true  method  of  effective  industrial 
reform.  Let  us  review  the  ground  which  we  have  trav- 
ersed and  obtain  in  brief  the  grand  outlines  of  our  scheme. 

First  Group — Fundamental  Principles. 

First. — Each  community  (town,  county,  city,  state, 
nation), — shall  constitute  itself  by  law  into  a  single 
Business  Corporation  with  every  citizen  as  a  responsible 
sovereign  agent  in  it,  to  own  and  control  its  own  proper 
utilities,  industrial  and  commercial,  as  far  as  the  in- 
terests of  the  people  may  demand.  This  business  cor- 
poration is  to  be  no  charity  organization.  It  is  to  be 
based  upon  strictly  business  principles.     And  it  is  to 


136  EFFECTIVE    INDUSTRIAL    REFORM. 

be  the  agent  of  the  whole  people  for  the  acquisition  of 
individual  wealth  with  justice  toward  all. 

Second.  Each  citizen  shall  subscribe  and  pay  in  by- 
law his  proper  quota  of  the  needed  capital, — the  gov- 
ernment shall  reserve  from  each  man's  weekly  or  monthly 
salary  a  sum  sufficient  for  this  purpose.  The  amount 
thus  reserved  shall  be  credited  to  each  man's  account 
as  so  much  capital  invested  and  owned. 

Third.  The  government  shall  guarantee  to  each 
investor  a  minimum  dividend  of  say  5%,  and  as  much 
more,  as  by  wise  management,  the  community  can 
make  the  business  pay. 

Fourth.  The  people  shall  acquire  and  own  collec- 
tively every  plant  which  the  interests  of  the  people  may 
demand.  Wherever  money  is  to  be  made  or  wealth  to 
be  created,  there  we  shall  go  and  acquire  possession. 

Second   Group — Administration. 

Fifth.  The  relative  wages  and  salaries  of  workmen 
and  officials,  shall  be  fixed  by  a  commission  chosen  by 
the  people  to  that  end.  We  shall  thus  secure  justice 
in  the  matter  of  wages  and  salaries. 

Sixth.  The  Directors  shall  be  chosen  by  the  people 
and  be  made  responsible  to  the  people.  Each  director 
to  be  nominated  at  least  one  month  before  election. 

Seventh.  Each  man's  capital  shall  be  paid  in  cash  to 
his  heirs  at  his  death;  or  he  may,  at  his  option,  convert 
it  into  an  annuity,  at  any  period  during  his  life,  to  be 
paid  to  himself  (or  wife  or  child),  until  death.  Thus 
every  man  or  his  heirs  is  to  receive  back  every  dollar 
that  he  invests. 


FUNDAMENTAL    FEATURES THIRD    GROUP.  137 

Eighth.  The  members  of  each  generation,  as  they 
become  of  age,  are  to  subscribe  their  quota  of  the 
capital  by  law  like  the  generation  preceding  them,  and 
so  become  in  turn  capitalistic,  responsible,  and  sov- 
ereign factors  in  the  business  corporation  and  take  the 
place  of  those  going  out  through  the  gate  of  death. 

Ninth.  Each  man's  opportunity  to  invest  equally 
with  every  other,  to  be  protected  by  adequate  rules. 
The  strong  shall  not  crowd  out  the  weak,  nor  the  weak 
the  strong,  and  the  requirements  to  subscribe  capital 
shall  not  be  oppressive.  There  shall  be  no  buying  and 
selling  of  stocks  and  stocks  shall  be  always  at  par. 

Third  and  Last  Group. 

Tenth.  The  people  shall  be  adequately  educated 
morally,  economically,  and  vocationally,  so  as  to  protect 
themselves  against  spoliation  and  fit  themselves  for  life. 

Eleventh.  This  business  corporation  shall  perform  all 
the  three  economic  functions, — in  relation  to  work  and 
wages, — commodities  and  prices, — and  in  securing  op- 
portunity to  invest  savings  and  earn  dividends  and  so 
accumulate  individual  wealth. 

Twelfth.  The  whole  scheme  shall  be  embodied  in 
constitutional  law  and  carried  into  execution  by  a 
special  Public  Department  created  to  that  end. 


Such  are  the  grand  features  of  our  plan  as  unfolded 
in  the  preceding  pages.  They  can  be  reduced  to  four 
distinctive  principles  as  follows: 

I.     The  public  Ownership  and  Sovereign  Control  of 


138  EFFECTIVE    INDUSTRIAL    REFORM. 

each  plant  by  the  whole  people  organized  by  law  into  an 
Efficient  Business  Corporation  for  that  end. 

II.  The  required  Individual  Subscription  of  the 
Capital,  the  Individual  Ownership  of  the  Stock  and  the 
earning  of  Dividends,  just  as  in  the  private  corporation. 

III.  The  Subordination  of  the  whole  to  the  acqui- 
sition of  Individual  Wealth,  just  as  in  the  private  cor- 
poration, but  with  efficiency  and  justice  toward  all. 

IV.  The  application  of  this  plan  to  every  industry 
just  so  fast  as  the  welfare  of  the  people  demand  it 
until  the  whole  industrial  and  commercial  realm  is 
brought  under  the  same  Efficient  Business  Corporation, 
directed  by  the  sovereign  will  of  the  people. 

6. 

For  the  successful  operation  of  this  scheme,  we  shall 
throw  the  entire  responsibility  upon  the  people  them- 
selves. 

Our  plan  of  reform  does  not  contemplate  the  forcing 
of  riches  upon  anybody.  It  does  not  seek  to  make 
men  wealthy  whether  they  work  or  not. 

Our  plan  differs  from  the  present  system  in  that  it 
will  constitute  the  people  into  a  single  Business  corpora- 
tion and  give  to  the  people,  individually  and  collec- 
tively, the  supreme  ownership  and  control  of  all  their 
industrial  activities;  it  will  free  them  forever  from 
exploitation  and  industrial  oppression.  It  will  take 
away  individualistic  strife  and  war,  and  unite  the  people 
in  sincere  co-operative  effort.  It  will  protect  every 
man  in  all  his  industrial  rights,  and  grant  to  each  equal 
opportunity  with  every  other  man.  And  it  will  inspire 
every  man  to  do  his  best. 


FUNDAMENTAL    FEATURES THIRD     GROUP.  139 

But  having  done  this,  it  will  throw  the  whole  re- 
sponsibility of  making  the  scheme  a  success  upon  the 
people  individually  and  collectively.  And  it  will  throw 
upon  each  man  the  responsibility  of  using  all  the  oppor- 
tunities and  encouragement  that  our  plan  offers,  for 
the  acquisition,  for  himself,  of  individual  wealth  and  gain. 

And  we  believe  that  inspired  by  the  sense  of  justice 
and  fair  treatment  which  each  man  will  receive  and  led 
onward  by  the  hopes  and  prospects  held  out  by  this 
plan,  each  man  will  do  his  best — except  the  physically 
and  mentally  unsound,  which  shall  be  an  ever  decreas- 
ing number  under  our  plan, — and  all  will  attain  to  a 
competence  by  the  time  that  middle  age  is  reached 
and  poverty  will  disappear. 

7. 

This  scheme  I  would  commend  to  every  city,  vil- 
lage, and  state  in  the  United  States  and  ask  each  to 
put  it  to  the  test  of  actual  experience.  Not  that 
I  would  apply  it  to  all  industries  at  once.  I  am  in  favor 
of  no  sudden  revolution.  Neither  do  I  believe  it  pos- 
sible to  reform  social  conditions,  out  of  hand,  by  any 
sudden  method.     But  no  sudden  method  is  needed. 

We  shall  begin  our  reform  by  persuading  some  city 
or  village  to  adopt  and  apply  our  scheme  to  some  one 
industry  as  its  Electric  lighting  plant  or  its  Street-car 
lines.  Several  cities  might  do  this  and  so  put  the 
scheme  to  the  test. 

Then,  if  successful  in  these  initial  experiments,  other 
cities  could  take  up  the  experiment,  and  other  Indus- 
tries could  be  municipalized. 


140  EFFECTIVE    INDUSTRIAL    REFORM. 

Then,  some  state  might  be  persuaded  to  try  it  in 
relation  to  its  railways  and  coal  mines  and  other  indus- 
tries. 

Thus  the  people  could  advance  in  the  application 
of  this  method  of  reform,  step  by  step,  just  as  fast  as 
it  could  be  made  successful,  until  all  industries  were 
owned  by  the  public.  We  would  apply  this  plan  ulti- 
mately even  to  the  United  States  Mail;  for  that  is  a 
productive  industry  and  ought  to  pay  a  dividend. 
Besides,  its  affairs  would  be  administered  much  more 
efficiently  and  with  less  corruption  than  now,  and  it 
would  no  longer  be  the  agent  of  special  privilege,  to 
powerful  corporations. 

We  would  thus  cause  every  city,  village,  state,  and 
nation, — and  ultimately  the  whole  world — to  become  or- 
ganized into  one  vast  industrial  Corporation  with  every 
man,  as  a  shareholder  and  a  responsible  agent  in  it, 
and  subordinate  the  whole  industrial  system  of  the 
earth  to  the  acquisition  of  individual  wealth,  with 
justice  toward  all. 


A  Country  Store. 


A  Large  Group  of  Utilities — which  the  people  should  own  and 
in  the  profits  of  which  all  should  share  is  all  Stores. 

By  consolidating  all  stores  in  city  and  village,  a  vast  saving 
in  running  expenses  could  be  made.  Prices  would  be  lowered  and 
handsome  dividends  realized. 

If  the  people  do  not  do  this  the  Corporations  will.  The  United 
Dry  Goods  Co.  incorporated  May  1909  with  a  prospective  capital- 
ization of  $51,000,000  looks  in  this  direction. 


Note  to  Part  III. 

The  pictures  on  the  preceding  pages  call  attention  to  a  few  of 
the  Industries  owned  by  the  Trust.     There  are  many  more. 

Sereno  S.  Pratt  in  The  World's  Work,  1907,  gives  the  following 
list  of  the  Industries,  already  owned  or  controlled,  at  that  date,  by 
the  Irresponsible  Corporation. 


Banking 

Railroads 

Iron  and  Steel 

Telegraph 

Coal 

Cable 

Gas 

Telephone 

Electric  Light 

Traction 

Shipping 

Express 

Oil 

Mining 

Beef 

Sugar 

Insurance 

Tobacco 

Copper 

Coffee 

Cotton 

Wool 

Hardware 

Machinery 

Real  Estate 

Building 

Dry  Goods 

Paper 

Agricultural  Implements 

Food  Products 

The  profits  on  all  these  Industries  are  enormous.  They  should 
all  be  owned  and  controlled  by  the  people,  constituted  by  law  into 
a  Stock-Corporation  to  that  end. 

Our  duty  as  citizens  and  as  stewards  of  the  wealth  of  this  coun- 
try, and  the  protection  of  our  rights  and  the  rights  of  our  children, 
demand  that  we  do  this. 

*See  "Our  Financial  Oligarchy"  by  Sereno  S.  Pratt,  in  the 
World's  Work,  Vol.  10,  p.  6504. 


Part  III.     Results  From  the 
Adoption  of  This  Plan. 

CHAPTER  X. 

THE  PEOPLE  SUPREME  AND  JUSTICE  EN- 
THRONED. 

We  are  not  among  those  who  imagine  that  all  the 
ills  of  society  can  be  cured  by  any  one  reform.  And 
we  do  not  imagine  that  the  millenium  will  come  with 
the  adoption  of  Public  Ownership  with  an  Individually 
owned  Capital,  unless  certain  other  reforms  go  along 
with  it.  But  we  do  believe  that  the  adoption  of 
that  system  will  cure  the  radical  defects  of  our  present 
industrial  system  and  make  America  a  new  world.  It 
will  create  industrially  a  new  heavens  and  a  new  earth, 
and  indirectly  affect  most  favorably  human  character 
and  every  institution  of  human  life. 

In  the  first  place, — the  adoption  of  our  plan  will 
overthrow  forever  that  despotic  power  which  now  rules 
the  industrial  world  and  for  the  first  time  in  human 
history  the  people  will  be  supreme  within  the  industrial 
realm  and  all  will  co-operate  for  the  efficient  acquisition 
of  wealth. 

The  truth  of  this  affirmation  can  be  seen  at  a  glance. 
For  when  once  the  community  shall  have  organized 
itself  by  law  into  a  single  Business  Corporation  and 
thereby  acquired  ownership  and  control  of  its  own 
industrial  and  commercial  life,  the  despotic  power  of 
the  few  shall  be  overthrown  forever  and  the   control  of 


142  EFFECTIVE    INDUSTRIAL    REFORM. 

each  plant  shall  be  given  entirely  and  forever  into  the 
hands  of  the  people.  For  in  very  deed  and  truth,  the 
people  will  collectively  own  each  plant ;  they  will  choose 
by  ballot  their  own  directors  and  determine  their  salar- 
ies ;  they  will  fix  their  own  wages  and  make  their  own  laws. 
Where  then  will  there  be  any  room  for  despotic  power? 

And  it  will  not  be  possible  for  any  man  or  any  com- 
bination of  men  to  regain  control.  For  by  what  method 
could  they  do  this?  They  cannot  regain  control  by 
acquiring  possession  of  a  majority  of  the  stock.  For 
since  no  man  will  ever  be  allowed  to  subscribe  for  more 
than  his  quota,  and  since  every  man  shall  be  required 
to  own  at  least  a  minimum  amount,  the  stock  will 
always  be  too  widely  distributed  to  allow  any  combi- 
nation to  come  into  power.  And  besides,  if  a  few  men 
should  come  into  possession  of  a  large  proportion  of 
the  stock  (which  is  impossible),  this  concentration  of 
power  would  soon  be  broken,  for,  on  the  death  of  one 
of  the  members,  his  stock  would  not  be  retained  by  the 
combination,  but  would  go  back  and  be  redistributed 
among  the  rising  generation.  Thus  under  our  plan 
there  will  be  a  constant  redistribution  of  the  stock, 
making  all  permanent  concentration  of  wealth  in  a  few 
hands  impossible. 

And  no  combination  of  men  could  acquire  control 
through  the  Industrial  officials.  For  the  Industrial 
officials  shall  be  chosen  by  the  people;  their  salaries 
shall  be  fixed  by  the  people;  and  they  shall  be  directly 
responsible  to  the  people.  The  officials  will,  therefore, 
strive  with  all  their  might  to  please,  not  some  combi- 
nation   of    men,    however    powerful,    but    the    people. 


RESULTS THE    PEOPLE    SUPREME.  143 

And  no  group  of  men  can  control  the  wages  and  salaries 
of  the  people.  For  the  people,  through  their  own 
Commission,  chosen  directly  by  themselves,  will  fix 
all  wages  and  salaries  as  public  sentiment  shall  demand. 

And,  finally,  the  people  will  make  all  laws,  by  ad 
referendum  vote,  and  determine  all  methods,  and  so 
keep  all  power  within  their  own  hands.  Where  then,  will 
there  be  any  place  for  despotic  power?  Besides,  the 
Australian  ballot  shall  be  employed, — no  man  can  vote 
by  proxy,  and  with  every  man  having  his  capital  in- 
vested and  dividends  at  stake,  the  people  will  be  in- 
capable of  bribery  and  will  be  ever  on  the  alert  to  pre- 
vent all  usurpation  of  power  and  keep  their  own  will 
supreme. 

And  our  plan  will  abolish  forever  the  old  principle 
of  a  competitive  and  predaceous  individualism  which 
now  lies  at  the  root  of  our  system,  and  it  will  substitute 
in  its  place  the  new  principle  of  organized  co-operation 
directed  by  the  sovereign  will  of  the  people.  The 
truth  of  this  affirmation  is  seen  at  a  glance. 

For  when  once  all  the  people  come  to  be  organized 
into  the  same  vast  producing  firm — into  a  single  Business 
corporation, — where  will  there  be  any  place  for  that 
predaceous  individualism  which  says,  "every  man  for 
himself?"  And  while  every  man's  interests  shall  be 
individualized,  and  the  sense  of  individual  responsi- 
bility will  be  preserved  and  intensified,  while  each  man 
will  own  his  own  capital  in  the  form  of  stock,  neverthe- 
less, all  being  in  the  same  vast  corporation,  organized 
co-operation  shall  be  inevitable.  It  will  become  the 
supreme  law  governing  the  action  of  each  and  all  to- 


144  EFFECTIVE    INDUSTRIAL    REFORM. 

gether.  Thus  a  new  principle  will  be  introduced  into 
the  industrial  world  at  its  very  foundation. 

And  our  plan  will  abolish  forever  all  warfare  between 
capital  and  labor  and  all  strife  between  corporation 
and  corporation  and  class  and  class. 

The  truth  of  this  affirmation  is  also  seen  at  a  glance. 
For,  first,  when  once  all  the  people  own  their  own 
industries,  and,  according  to  our  plan,  each  man  shall 
become  both  capitalist  and  laborer,  employer  and  em- 
ployee,— where  will  there  be,  then,  any  room  for  strife 
between  the  two?  No  man  will  go  to  war  with  himself. 
The  "binding  link"  between  capital  and  labor  is  the 
union  of  both  factors  in  the  same  man  and  in  every 
citizen.  And  such  will  be  the  binding  link  created  by 
the  adoption  of  our  scheme  of  reform. 

And  there  can  be  no  longer  warfare  between  corpora- 
tion and  corporation.  For  there  will  be  only  one  great 
corporation  and  that  will  embrace  all  the  people. 
And  the  warfare  which  marks  every  large  business 
to-day,  caused  by  the  inside  syndicate  of  capitalists 
seeking  to  rob  the  employer,  the  consumer  and  the 
outside  investor,  will  cease.  For  there  can  be  no  in- 
side syndicate  under  our  scheme.  All  the  people  will 
have  their  capital  equally  invested  according  to  age — 
or  practically  so, — every  man  will  possess  equal  power 
with  every  other.  There  will,  therefore,  be  no  sepa- 
ration of  the  people  into  warring  groups  as  indicated 
by  the  terms — "inside  syndicate"  and  "outside  inves- 
tors." All  will  be  equally  inside  and  equally  outside, 
if  those  terms  can  have  any  meaning  under  our  plan. 
And   since   all  men  will  be   both  capitalist   and    em- 


RESULTS — THE    PEOPLE    SUPREME.  145 

ployee, — and  all,  both  producer  and  consumer,  all 
strife  between  these  classes  will  forever  cease.  When 
once  our  plan  is  fully  inaugurated,  an  Industrial  peace 
will  settle  forever  upon  the  world.  And  organized  co- 
operation, directed  by  the  sovereign  will  of  the  people, 
will  be  the  new  principle  enthroned  for  the  first  time 
in  human  history.  For  the  people  organized  for  the 
first  time  into  a  single  producing  firm,  with  every  man 
as  a  responsible,  capitalistic  and  sovereign  factor  in  it, 
will  vigorously  co-operate  in  the  production  of  all  utili- 
ties and  in  the  acquisition  of  individual  wealth  and  gain. 
And  the  motives  to  vigorous  effort,  will  be  as  great 
then  as  now  and  far  more  widely  felt.  For  ALL  will 
have  their  dividends  and  their  future  wealth  at  stake. 
And  all  will  strive  to  do  their  best. 

And  what  a  transformation  this  change  in  our 
industrial  system  will  produce  in  human  society  and 
especially  in  relation  to  human  happiness.  All  that 
terrible  warfare  that  now  marks  the  industrial  world 
shall  cease.  The  terrible  anxiety  and  sense  of  insecur- 
ity shall  be  taken  away  and  the  human  soul  shall  for 
the  first  time  in  human  history  experience  industrial 
security  and  peace. 

Second  Result — Justice  and  Equal  Opportunity  Es- 
tablished.— The  adoption  of  the  new  order  will  bring 
evenhanded  justice  and  fair-play  between  man  and  man 
within  the  whole  industrial  realm. 

First. — It  will  establish  justice  in  relation  to  wages 
and  salaries.  For  under  our  plan,  a  few  high  officials 
will  no  longer  be  allowed  to  fix  their  own  salaries  and 
take  to  themselves  the  lion's  share.     And  the  law  of 


146  EFFECTIVE    INDUSTRIAL    REFORM. 

supply  and  demand,  the  ability  of  one  man  to  under- 
bid another,  shall  have  nothing  to  do  in  the  matter. 
Wages  and  salaries  shall  be  fixed  under  our  plan  by  a 
commission  chosen  by  the  people  to  that  end.  Hence 
wages  and  salaries  shall  be  determined  by  the  law  of 
REASON  and  JUSTICE  before  a  single  man  is  engaged. 
And  the  voice  of  the  whole  people,  collectively  expressed, 
the  only  legitimate  authority  in  this  matter  shall  say 
what  Reason  and  Justice  demand.  And  so  Justice  shall 
be  inevitable.  For  when,  under  our  plan,  each  man 
shall  have  become  a  sovereign,  capitalistic  factor  in 
the  single  producing  firm  of  the  people,  the  universal 
demand  shall  be  that  justice  be  done.  And  the  one 
question  which  all  shall  ask  will  not  be — How  cheap 
can  we  get  the  men,  but, — what  is  each  man's  services 
worth  in  this  great  co-operative  whole  of  which  we  all 
are  members?  What  does  each  man  produce?  What 
is  he  worth  relatively  to  the  rest?  And  compensations 
for  the  various  vocations  shall  be  fixed  according  to 
Justice.  Each  man  shall  be  able  to  make  effective 
protest  against  every  wrong  and  demand  that  his  own 
rights  and  the  rights  of  his  neighbors  be  properly  re- 
garded. 

Not  that  justice  shall  come  all  at  once.  A  sudden 
revolution  in  wages  and  salaries  would  be  unwise. 
Time  and  experience  shall  be  necessary  to  learn  exactly 
what  justice  demands.  Without  doubt  the  enormous 
salaries  now  paid  to  high  officials  shall  be  cut  in  two, 
and  cut  in  two  several  times  over.  But  the  wages  of 
the  great  mass  of  the  people  shall  be  changed  little  by 
little.     The  mind  of  the  whole  people  shall  be  concen- 


RESULTS JUSTICE     ESTABLISHED.  147 

trated  on  the  problem.  The  relative  value  of  various 
kinds  of  labor  shall  be  carefully  analysed  and  compared 
with  each  other.  And  little  by  little  a  just  judgement 
shall  be  attained  and  little  by  little  justice  shall  be  done. 

And  the  obstacles  in  the  way  of  coming  to  a  just 
decision  shall  be  removed.  To-day  one  great  obstacle 
in  the  way  of  a  just  judgement  is  the  element  of  "risk" 
borne  by  the  capitalist.  A  man's  wages  to-day  may  be 
small,  but  he  bears  no  risk  in  the  business.  His  wages 
must  be  paid  whether  the  capitalist  makes  anything  or 
not.  On  the  other  hand,  every  capitalist  runs  more 
or  less  of  a  risk  all  the  time.  The  coming  of  a  com- 
petitor, a  change  in  population,  the  failure  of  some 
other  firm,  may  at  any  time  plunge  him  into  ruin. 
This  element  of  risk  may  wax  and  wane  but  it  is  always 
present. 

Now  under  present  conditions  capitalists  argue,  and 
argue  justly,  that  they  need  some  compensation  for 
bearing  this  element  of  risk.  And  the  question  comes 
up, — How  much  of  a  compensation  does  this  element 
of  risk  demand?  But  that  question  no  man  can  an- 
swer, for  no  man  can  tell  how  great  the  risk  is.  To-day 
one's  business  may  seem  to  be  most  secure;  to-morrow, 
conditions  may  arise  compelling  him  to  fight  for  his 
very  life.  The  result  is  that  every  capitalist  adopts 
the  law  to  engage  men  at  the  lowest  wages  possible 
and  take  all  the  rest  himself.  He  must  make  hay 
while  the  sun  shines. 

But  under  our  plan,  this  disturbing  factor  shall  be 
removed.  When  all  the  people  become  one  great  pro- 
ducing firm,  this  element  of  risk  will  largely  disappear, 


148  EFFECTIVE    INDUSTRIAL    REFORM. 

and  in  any  case,  it  will  be  borne  by  all  the  people 
equally.  Hence,  it  can  be  entirely  eliminated  from  the 
problem  of  the  relative  value  of  different  vocations. 

And  in  the  new  order,  we  shall  come  to  correctly 
appreciate  many  vocations  which  we  now  despise. 
To-day  many  regard  the  work  of  the  scavenger  and  the 
cleaner  of  sewers,  as  "menial"  and  contemptible.  And 
we  regard  the  men  engaged  in  these  callings  as  little 
above  oxen,  worthy  of  an  ox's  reward.  But  when  we 
shall  have  transformed  each  community  into  a  single 
producing  firm,  doing  its  own  work,  when  the  digger 
of  ditches  and  other  workers  in  these  "menial"  callings 
shall  become  capitalists  with  an  authority  to  speak 
equally  with  that  of  every  other  man,  then  we  shall 
correctly  appreciate  these  "lower"  callings.  Let  any 
service  be  unjustly  compensated  with  low  pay  and  at 
once  we  begin  to  regard  it  as  menial  and  of  little  worth. 
There  was  a  time  when  the  writer  of  books  and  the 
work  of  the  trader, — both  of  which  are  so  honored 
to-day — were  regarded  as  contemptible;  and  they  were 
so  regarded  because  they  were  poorly  rewarded  and 
inadequately  protected.  And  who  knows  but  that  the 
time  may  come  when  the  work  of  cleaning  sewers  and 
destroying  microbes  and  so  making  the  city  sweet  and 
healthy,  shall  be  regarded  with  as  much  honor  and 
viewed  as  requiring  as  much  skill  and  training  as  the 
work  of  the  physician  who  cleans  out  our  digestive 
tract  or  the  dentist  who  cleans  and  fills  a  decayed 
tooth?  At  any  rate  when  our  plan  shall  be  fully  in- 
augurated, every  calling  shall  be  brought  before  the 
clear  and  unbiased   judgment  of    the  people,  its    true 


RESULTS — JUSTICE     ESTABLISHED.  149 

worth  shall  be  determined  and  justice  shall  be  done. 

To  what  extent  the  wages  and  salaries  of  skilled 
and  common  labor  shall  be  increased, — how  much  the 
salaries  of  teachers  and  others  shall  be  raised,  we  can- 
not prophesy.  Charles  B.  Spahr  affirmed  in  the  book 
before  quoted,  that  one-eighth  of  the  people  in  the 
United  States  received  one-half  of  the  aggregate  in- 
come. This  would  mean  that  on  the  introduction  of 
the  new  order,  there  will  be  a  radical  paring  down  of 
the  incomes  at  the  top  of  society  and  a  large  lifting  up 
of  incomes  at  the  bottom.  Farthermore,  under  the 
operation  of  our  scheme,  working  men  will  be  immeas- 
urably elevated  in  intelligence  and  skill.  Labor-saving 
machinery  will  be  applied  to  many  callings  now  per- 
formed by  manual  labor;  and  the  compensation  of 
labor  shall  be  greatly  increased.  By  the  term  "labor" 
we  mean  not  only  working  men,  but  the  farmer  and 
other  producers  of  raw  material  who  are  now  so  poorly 
compensated.  But  whatever  be  the  wages  of  the  people 
in  the  future,  justice  shall  be  done.  And  for  the  first 
time  in  human  history  exact  and  even-handed  justice 
shall  rule  the  Industrial  and  Commercial  world. 

Farthermore  the  introduction  of  our  plan  will  establish 
equality  of  opportunity  to  each  man  according  to  his 
worth,  in  obtaining  work  and  mounting  to  high  posi- 
tions. For  when  the  whole  people  are  supreme,  and 
our  school  system  is  reformed,  all  influences  shall  tend 
to  create  the  demand  that  Justice  shall  be  done  in  this 
matter  also. 

Second. — Justice  shall  be  done  in  the  matter  of  prices 
and  the   quality  of  commodities  paid  for.     For  it  is 


150  EFFECTIVE    INDUSTRIAL    REFORM. 

evident  that  the  one  law  governing  the  people  under 
our  plan  will  be  to  make  prices  as  low  as  good  wages 
and  fair  dividends  will  allow. 

Third. — It  can  be  seen  that  the  new  order  will  bring 
absolute  justice  and  equal  opportunity  in  the  matter  of 
investments  and  dividends  and  the  acquisition  of  indi- 
vidual wealth.  For  in  the  first  place,  with  justice  in 
the  matter  of  wages  and  salaries  and  with  every  man's 
opportunity  to  invest  fully  protected,  every  man  shall 
be  able  to  invest  his  full  quota  when  his  turn  to  invest 
shall,  from  time  to  time,  arrive.  And  with  dividends 
always  equal  to  all  in  rate  percent,  with  all  graft  and 
watering  of  stocks  abolished,  with  stocks  always  at 
par,  and  every  man's  right  to  continued  investment 
amply  protected,  the  opportunity  of  each  man  to  save, 
invest,  and  acquire  wealth  will  be  kept  equal  with  that 
of  every  other  man  and  justice  shall  reign  supreme. 
Thus,  under  the  operation  of  the  new  order,  our  great 
industrial  activities,  organized  into  one  whole,  shall 
become  the  agent  of  the  whole  people  for  the  acquisi- 
tion of  individual  wealth  with  justice  toward  all. 

Finally. — It  should  be  noted  that  the  plan  in  this 
book  will  issue  in  the  just  distribution  of  that  wealth 
which  results  from  the  growth  of  cities  and  other  changes 
and  is  not  the  product  of  the  labor  of  the  possessor. 

Mr.  Carnegie  in  Problems  of  To-day  speaks  of  a 
farmer,  able  to  give  each  of  his  two  sons  a  farm,  one  in 
the  center  of  Manhattan  Island,  the  other  beyond 
Harlem.  Both  are  of  equal  value  and  the  sons  cast 
lots  for  the  farms.  Both  men  are  equally  good  and 
industrious  men.     But  the  growth  of  the  city  of  New 


RESULTS JUSTICE     ESTABLISHED.  151 

York  northward  makes  the  children  of  the  younger  son 
millionaires,  without  their  doing  any  work  whatever. 
The  community  created  the  millionaires  wealth.  But 
the  children  of  the  other  son  remain  simple  farmers 
in  comfortable  "circumstances.  •  Thus,  says  Mr.  Carnegie 
the  wealth  of  the  millionaire  is  often  created  without 
any  labor, — at  least  on  his  own  part. 

Now  I  maintain  that  the  great  wealth  of  many  a 
man  is  created  in  this  way.  And  on  the  other  hand 
many  a  man  gradually  loses  everything  simply  by  a 
reverse  process  entirely  beyond  his  agency  or  control, 
through  the  gradual  moving  of  business  away  from 
his  neighborhood. 

Thus  great  injustice  is  done.  For  I  maintain  that 
for  a  few  drones  to  gradually  come  into  possession  of 
millions  created  indirectly  by  the  labor  of  the  com- 
munity, while  others  who  created  the  wealth  remain 
poor,  is  unfair. 

Now  my  plan  will  remedy  this  injustice.  For,  to 
return  to  the  illustration,  let  us  suppose  that  in  the 
case  cited,  all  the  real  estate  in  the  city  and  in  the 
whole  State  was  owned  by  all  the  people  collectively, 
and  that  each  citizen  had  his  quota  of  the  capital  in- 
vested in  it.  Then  when  land  at  any  place  increased 
in  value  through  the  growth  of  the  city  or  any  other 
cause,  the  profit  from  the  increase  would  go  to  all  the 
people  alike.  In  like  manner  when  through  any  cause 
a  business  declined  all  would  share  the  loss.  Thus  my 
plan  will  bring  justice  amidst  all  the  rise  and  fall  of 
values  in  different  places.  And  yet  all  will  gradually 
grow  richer  as  the  general  wealth  of  the  country  increases. 


CHAPTER  XI. 

EFFICIENCY  ATTAINED  AND  THE  UNIVERSAL 
WELFARE  PROMOTED. 

But  we  have  not  yet  completed  our  view  of  the 
beneficial  effects  resulting  from  the  introduction  of  our 
scheme  of  reform.  In  the  preceding  Chapter,  I  unfolded 
the  organic  results  wrought  by  it  in  our  industrial  con- 
stitution and  its  moral  effects  in  the  realm  of  Distri- 
bution, and  I  showed  how  it  will  enthrone  justice  and 
fair-play  in  the  whole  Industrial  and  commercial  world. 
We  come  now  to  its  effect  on  Production  and  our  whole 
human  life  on  earth. 

Efficient  Production. — Under  the  new  order,  produc- 
tion will  become  most  efficient  and  the  wealth  of  the 
country  shall  be  greatly  increased. 

In  order  to  efficiency  of  production,  several  condi- 
tions must  be  established.  First.  All  warfare  between 
capital  and  labor,  and  all  strife  between  corporation 
and  corporation,  and  class  and  class,  must  cease.  Second 
— The  whole  people  must  become  vitally  interested  in 
every  industry  and  every  plant.  Third. — The  best  men 
must  be  elected  as  directors  of  each  plant.  Fourth. — 
Officials  and  workmen  must  feel  the  stimulous  of  a  vital 
interest  in  their  work  and  the  success  of  the  business  in 
which  each  is  engaged.  Fifth. — The  inventive  genius  of 
men,  both  in  creating  new  machinery  and  developing 
new  methods,  must  be  encouraged.  And,  Sixth — the 
whole  Industrial  world  must  be  correlated  in  all  its 
parts  and  all  so  integrated  as  to  form  one  organized 
and  efficient  whole. 


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EFFICIENCY    ATTAINED.  153 

Now  under  the  operation  of  our  plan,  and  under 
our  plan  alone,  all  these  conditions  will  be  fully  realized. 
For  as  we  have  before  shown,  all  warfare  between 
capital  and  labor,  with  all  the  attendant  evils,  will 
cease,  and  all  strife  between  corporations  and  classes 
shall  disappear.  And  since  every  man  shall  have  from 
$400  to  $10,000  invested,  according  to  age,  and  since 
wages  and  prices  and  dividends  shall  be  always  at 
stake,  every  man,  young  and  old,  will  be  vitally  inter- 
ested in  the  success  of  every  plant  and  shall  demand 
that  each  be  made  successful.  For  the  same  reason 
the  people  will  be  careful  to  elect  only  the  most  efficient 
men  to  the  directorate  of  each  plant.  It  will  be  only 
men  who  have  grown  up  in  the  business  and  whose 
ability  and  skill  have  been  tried  and  proven,  that  will 
be  chosen.  And  since  every  working  man  and  every 
official  will  also  be  a  capitalist  with  dividends  at  stake, 
each  man  and  each  official  will  not  only  strive  to  do 
his  best  but  also  demand  that  all  others  do  their  best. 
And  the  idle  and  inefficient  will  be  compelled  either  to 
do  better  work  or  take  less  pay  or  be  discharged.  And 
every  man's  inventive  genius  and  his  ability  to  devise 
new  and  better  methods  will  be  fully  aroused  and 
encouraged.  For  all  such  skill  and  ability  will  be 
gladly  welcomed  by  all;  and  the  benefits  will  not  be 
appropriated  as  now  by  a  despotic  plutocracy,  but 
they  shall  accrue  to  the  advantage  of  all  the  people; 
and  each  inventor  shall  be  amply  rewarded.  And 
under  our  plan,  provision  can  be  made  for  the  opera- 
tion of  individual  enterprise  by  daring  souls,  acting  for 
a  time  independent  of  the  people  as  a  whole.     The 


154  EFFECTIVE    INDUSTRIAL    REFORM. 

government  can  permit  and  encourage  such  enterprise 
with  the  understanding  that  when  made  successful,  the 
enterprise  shall  be  taken  over  by  the  people  and  the 
promoters  amply  rewarded.  And  when  every  muni- 
cipality or  district,  every  State,  every  nation,  and 
when  all  nations  of  the  earth  shall  be  constituted  into 
a  single  producing  firm  according  to  our  plan,  it  will 
be  possible  to  correlate  and  integrate  the  whole  indus- 
trial activities  of  each  nation  and  indeed  of  the  whole 
earth  and  so  achieve  the  most  efficient  production  and 
secure  the  welfare  of  all  the  people.  Thus  it  is  inevita- 
ble that  under  the  operation  of  our  scheme  of  reform, 
our  industrial  activities  will  gradually  attain  to  an  ever 
increasing  efficiency — to  which  the  imagination  can 
place  no  limit. 

And  the  introduction  of  the  new  order  will  greatly 
increase  the  aggregate  wealth  of  the  country  and  make 
every  family  well-to-do  and  even  wealthy  by  the  time 
that  middle  life  is  reached.  For  not  only  will  effi- 
ciency of  production  be  increased  a  hundred-fold,  not 
only  will  the  evils  of  over-production  and  those  financial 
crashes  that  periodically  come  through  rash  speculation, 
inflated  credit,  and  the  waste  of  predaceous  wealth,  be 
abolished,  but  a  new  home-market  shall  be  created 
which  will  revolutionize  trade  and  increase  wealth  in 
leaps  and  bounds.  Let  me  explain.  In  order  to  sell 
goods  we  must  have  a  people  able  to  buy.  In  order  to 
have  a  people  able  to  buy,  we  must  have  a  people  who 
are  not  only  industrious  but  who  are  paid  the  full 
value  of  their  labor.  But  to-day  from  one-half  to  two- 
thirds  of   the  people  are  robbed  of   their  just  compen- 


EFFICIENCY    ATTAINED.  155 

sation.  They  are  paid  barely  sufficient  to  sustain  life. 
And  the  money  which  should  be  paid  to  them,  is  wasted 
in  the  follies  of  the  rich.  What  is  the  result?  The 
result  is  that  we  destroy  the  Home-Market  for  our 
goods.  We  produce  but  cannot  sell.  And  we  have 
the  appalling  experience  of  seeing  our  granaries  filled  to 
overflowing  with  wheat  which  we  cannot  sell  and  yet 
the  great  mass  of  the  people  are  hungry  for  bread. 
We  see  our  store-houses  filled  to  the  roof  with  clothing 
which  we  cannot  sell,  and  yet  the  great  mass  of  the 
people  go  naked.  We  see  our  carpenters  and  other 
workmen  going  idle  unable  to  get  work  and  yet  the 
great  mass  of  the  people  are  inadequately  housed. 
Thus  through  the  greed  of  the  plunderers  at  the  top, 
who  rob  the  people  of  the  just  remuneration  of  their 
toil,  we  destroy  our  home-market  and  arrest  the  ac- 
quisition of  wealth. 

Now  the  adoption  of  our  scheme  will  change  all 
this.  For,  first,  our  plan  will  cause  every  man  to 
receive  the  full  remuneration  of  his  labor.  And  this 
will  mean  the  doubling  and  tripling  of  the  incomes 
of  the  people.  And  this  will  mean  the  doubling  and 
tripling  of  the  ability  of  the  people  to  buy.  In  other 
words,  we  shall  create  a  new  home-market  for  our 
goods  such  has  never  existed  before,  or  rather  which 
has  been  annihilated  by  the  greed  of  predatory  wealth. 
But  what  will  be  the  effect  of  this  on  the  creation  of 
wealth?  Its  effect  will  be  to  double  the  wealth  of  the 
country  in  a  very  short  time.  For  with  the  creation 
of  this  vast  home-market,  there  will  be  a  vast  revival 
of  industry  and  a  vastly  increased  demand  for  capital 


156  EFFECTIVE    INDUSTRIAL    REFORM. 

and  labor,  to  meet  the  demand.  But  this  will  mean  a 
new  call  for  capital  to  be  invested  and  a  new  earning 
of  dividends.  In  other  words,  it  will  mean,  immediately 
a  new  increase  in  the  aggregate  wealth  of  the  country. 
But  the  process  will  not  stop  here.  It  will  in  short 
never  stop.  For  this  increase  of  wealth  under  our  plan 
will  be  distributed  among  all  the  people.  This  will 
mean  a  still  farther  increase  in  the  ability  of  the  people 
to  buy.  And  this  will  mean  a  still  farther  increase  in 
the  demand  for  goods.  This  will  mean  a  new  demand 
for  capital  and  labor  with  new  opportunities  to  invest. 
And  this  will  again  mean  a  new  increase  in  the  aggre- 
gate and  distributed  wealth  of  the  land. 

Thus,  under  the  operation  of  our  plan,  the  creation 
and  increase  of  wealth  can  never  be  arrested  by  pre- 
daceous  power.  When  the  wealth  which  the  people 
create  shall  come  back  to  the  people  themselves,  there 
will  be  no  limit  to  its  increase.  The  people,  freed  from 
all  trammels  and  robbery,  will  be  able  to  create  all  that 
they  please.  And  the  aggregate  and  distributed  wealth 
of  the  country  will  be  doubled  again  and  again.  And 
what  will  this  mean? 

The  aggregate  wealth  of  this  country  in  1900  was 
one  hundred  billions  of  dollars.  It  had  just  doubled 
itself  in  thirty  years  between  1865  and  1895.  Now 
when  our  plan  is  adopted  the  wealth  of  the  country 
must  soon  leap  to  two  hundred  billions  and  then  to 
three  hundred  billions. 

And  what  will  this  mean  in  relation  to  the  wealth 
of  each  man?  If  the  aggregate  wealth  of  the  country 
was  now  justly  distributed  after  our  plan,  it  would  give 


Agricultural  National  Bank,  Pittsfield,  Mass. 
When  we  have  effective  Industrial  Reform,  every  industrious 
man  can  have  at  the  age  of  45  from  $10,000  to  $12,000  invested 
in  his  country's  industries,  with  a  guaranteed  dividend  of  $500 
or  $600  and  a  surplus  making  in  all,  an  income  of  $1000  or  $1200,  a 
year,  besides  his  wages  (p.  157). 


EFFICIENCY    ATTAINED.  157 

to  each  family  when  middle  life  is  reached,  at  least, 
$10,000.*  But  when  under  the  operation  of  our  plan 
the  aggregate  wealth  of  the  country  is  doubled  or 
increased  again  and  again,  the  wealth  possessed  by 
each  family  by  middle  life  will  leap  to  $20,000  and  even 
$30,000.  In  short,  we  can  set  no  assignable  limit  to 
the  wealth  that  each  family  may  enjoy,  when  once  the 
people  own  their  own  industries  and,  untrammelled  by 
robbery,  create  their  own  products  and  produce  their 
own  wealth.  And  if  on  this  wealth  the  people  can  earn 
a  dividend  of  10%,  the  yearly  income  of  each  family 
above  wages  and  salary  shall  be  from  $1000  to  $3,000. 

And  here  we  should  observe  that  the  adoption  of 
our  plan  will  do  away  with  all  necessity  for  the  perni- 
cious pension  system  now  advocated  by  many  and  in 
some  cases  adopted. 

The  pension  system,  viewed  as  a  remedy  for  indus- 
trial wrongs,  I  am  convinced  is  a  perilous  mistake. 
And  yet  many  people  are  thoughtlessly  advocating  it; 
and  many  capitalists  are  cunningly  advocating  and 
adopting  it, f  as  a  preventive  of  all  real  industrial  reform. 
Our  cities  are  pensioning  their  policemen  and  some  pen- 
sion their  teachers  in  the  schools.  And  certain  states- 
men advocate  pensioning  all  members  of  the  United 
States  civil  service.  England  has  recently  (1907), 
passed  a  measure  pensioning  all  the  aged  poor. 

This  pension  system  is  most  unjust.  For  either 
these  pensioned  classes  do  or  do  not  receive  already  the 
full  compensation  due  their  work.  If  they  do,  then  it 
is  robbery  of  the  people  to  pay  them  a  pension  in  addi- 

*See  Appendix  III.     fSee  Chapter  XVII. 


158  EFFECTIVE    INDUSTRIAL    REFORM. 

tion  to  what  they  now  receive.  If  they  do  not,  then 
the  people  are  robbing  them  and  ought  to  pay  them  a 
larger  salary.  In  either  case  a  pension  is  unjust  and 
out  of  place. 

Again,  the  pension  system  tends  to  create  a  semi- 
parisitic  and  a  semi-predaceous  class,  from  whom  all 
independence  of  character  and  all  patriotism  has  fled, 
whose  only  aim  will  be  to  load  themselves  onto  the 
public  and  secure  an  increase  of  pension. 

However  much  the  English  people  may  deplore  the 
awful  poverty  of  the  lower  classes,  they  are  not  resort- 
ing to  the  right  method  of  relieving  or  curing  it.  On 
the  contrary,  I  am  convinced  that  it  will  work  immense 
harm  in  destroying  independence  of  character,  rapidly 
developing  the  pauper  spirit,  and  it  will  in  the  end 
greatly  increase  the  misery  it  seeks  to  relieve.  The 
only  way  to  relieve  the  poverty  of  the  English  people 
is  to  institute  a  new  industrial  system  that  will  lift  the 
heel  of  Industrial  oppression  and  wrong  and  give  to 
the  people  the  full  earnings  of  their  labor.  Then  every 
man  shall  be  able  to  pension  himself,  and  so  be  an 
independent,  self-respecting,  and  self-reliant  man. 

Now  the  adoption  of  our  scheme  of  reform  will 
make  all  resort  to  the  pension  system  forever  unneces- 
sary. It  will  aim  to  educate  and  train  every  man  for 
some  useful  calling.  It  will  aim  to  employ  all  the  crea- 
tive energies  of  labor  both  of  brain  and  hand  and  so 
supply  every  person  with  work.  It  will  pay  a  just  wage. 
It  will  not  despoil  men  by  high  prices.  It  will  call 
upon  each  man  to  subscribe  his  quota  of  the  country's 
capital    and    so    become    a    capitalistic    and    sovereign 


EFFICIENCY    ATTAINED.  159 

agent  in  his  country.  And  on  this  capital  he  will  re- 
ceive as  large  a  dividend  as  he  and  his  fellow  citizen 
can  cause  the  business  of  the  country  to  earn.  Every 
man  will  thus  be  thrown  onto  his  own  responsibility. 
He  will  feel  that  the  income, — the  dividends  which  he 
receives,  he  has  earned  himself.  And  he  will  become 
a  self-reliant,  self-respecting  citizen.  Thus  our  plan 
will  do  away  with  all  necessity  for  that  debauching 
and  degrading  pension-system  which  every  self-respect- 
ing man  ought  to  abominate  and  every  wise  Statesman 
despise. 

2. 

And  what  will  all  these  changes  in  the  Industrial 
world  have  on  Individual  character,  home-life,  politics, 
education  and  religion,  and  we  may  add  on  the  happi- 
ness and  welfare  of  man? 

We  believe  that  the  effect  of  these  changes  in  all 
these  directions  will  be  simply  incalculably  for  good. 
In  the  first  place,  all  poverty  and  the  evils  of  poverty 
shall  disappear.  Moses  declared  that  if  the  people 
would  be  obedient  to  God's  law  of  justice  and  mercy, 
"there  would  be  no  poor  among  them."  Jesus  affirmed 
the  same  thing  "Seek  ye  first  the  kingdom  of  God  and 
his  righteousness" — that  is  be  obedient  to  the  divine 
law  of  justice  and  mercy — "and  all  these  things" — 
houses,  lands,  education,  wealth, — "shall  be  added  unto 
you."  In  the  past  we  have  been  endeavoring  to  per- 
suade individuals  to  build  their  lives  on  the  foundations 
of  justice  and  truth,  but  we  have  not  endeavored  to 
found  society  and  social  institutions  on  these  principles. 
While  we  have  been  exhorting  men  to  be  honest  in  all 


160  EFFECTIVE    INDUSTRIAL    REFORM. 

their  business  relations,  we  have  maintained  an  indus- 
trial and  commercial  system  that  is  founded  in  wrong 
and  builded  in  iniquity  and  has  issued  in  organized 
robbery.  Now  with  the  adoption  of  our  plan,  for  the 
first  time  in  human  history,  we  shall  have  an  industrial 
and  commercial  system  founded  in  exact  and  even- 
handed  justice  with  co-operation  between  man  and 
man.  The  whole  element  of  individual  and  organized 
plunder  shall  be  swept  out  of  it,  root  and  branch,  and 
the  rights  and  responsibility  of  every  man  shall  be 
fully  recognized  and  protected.  And  when  each  man 
shall  become  a  capitalist,  by  law,  in  our  industrial 
system,  then,  all  poverty,  with  all  its  heart-aches,  its 
repression  of  the  mind,  its  bitter  trials  and  temptations 
shall  be  swept  away  forever.  And  the  promise  of  the 
word  of  God  shall  be  fulfilled. 

And  under  our  plan,  riches  will  cease  to  exercise 
that  baleful  and  degenerating  influence  which  marks 
so  generally  the  possession  of  wealth  to-day.  Wealth 
that  is  gotten  by  honest  toil  and  is  gotten  co-operatively 
with  a  real  respect  for  others'  rights,  is  rarely  abused 
by  its  possessor.  On  the  contrary,  knowing  the  value 
of  wealth  and  its  beneficent  uses,  men  will  employ  it 
as  the  agent  of  good  to  the  whole  people.  It  is  wealth 
gotten  by  plunder,  and,  especially,  wealth  inherited  by 
those  who  never  know  the  burden  of  toil  that  causes 
harm.  It  is  those  who  are  reared  in  luxury  and  have 
every  want  supplied,  that  are  ruined  by  wealth  and 
grow  up  effeminate,  selfish,  immoral  and  degenerate. 
Now  the  introduction  of  our  plan,  will  deprive  wealth 
of  this  baleful  influence.     For  under  the  operation  of 


*>  — . 


O      c3  rt 


H 


EFFICIENCY    ATTAINED.  161 

the  new  order,  every  man  will  bear  the  yoke  of  toil 
and  severe  endeavor  while  young,  and  thereby  learn  to 
appreciate  the  cost  and  the  value  of  wealth  and  so 
learn  to  make  a  right  use  of  it  when  it  is  attained. 
For  under  the  operation  of  our  plan,  society  will  no 
longer  be  divided  into  a  small  parasitic  class,  on  the 
one  hand,  and  on  the  other,  a  large  working  class  who 
know  nothing  but  toil  and  poverty  from  the  cradle  to 
the  grave.  But  every  one  will  work  while  young  and 
so  learn  to  appreciate  the  value  of  wealth  and  to  use 
and  not  abuse  it,  when,  in  middle  life,  wealth  is  attained. 
Thus  under  the  operation  of  the  new  plan,  wealth  will 
be  possessed  by  all  and  it  will  become  the  means  of 
immeasurable  good  and  an  unmixed  blessing  to  all  the 
race. 

The  new  order  will  work  for  the  constant,  immeas- 
urable, elevation  of  individual  character. 

No  one  can  deny  that  many  among  the  working 
people  to-day  are  dull,  spiritless,  and  unaspiring.  But 
this  is  the  result  largely  of  ages  of  oppression  and 
poverty  and  their  deprivation  of  all  part  in  the  indi- 
vidual and  social  responsibilities  of  life.  The  masses 
have  not  had  that  training,  therefore,  which  the  bear- 
ing of  large  responsibility  brings.  Now  the  adoption 
of  our  scheme  of  reform,  will  change  all  this.  The  chief 
objection  which  some  make  to  our  plan  is  the  fact  that 
it  will  throw  upon  the  people  individually  the  respon- 
sibility of  subscribing  each  his  quota  of  the  required 
capital  and  of  bearing  his  share  of  the  burdens  of  the 
business.  But  it  is  in  this  very  element  that  the  chief 
virtue  of  our  plan  lies  not  only  in  stimulating  produc- 


162  EFFECTIVE    INDUSTRIAL    REFORM. 

tion  but  in  elevating  the  character  of  all  working  men. 
Why  is  the  business  man  to-day  so  alert,  and  far-seeing, 
— why  is  he  so  interested  in  legislation,  why  is  he  so 
responsible  and  capable?  It  is  because  the  success  of 
his  business  demands  these  qualities.  It  is  because 
his  personal  interests  are  vitally  connected  with  legis- 
lation and  all  social  conditions.  Now  when  we  make 
every  man  a  capitalist,  when  we  throw  upon  every 
citizen  the  responsibility  of  subscribing  his  quota  of 
the  world's  capital,  when  his  capital  and  dividends  are 
at  stake,  and  his  prosperity  is  dependent  upon  correct 
legislation  and  all  other  social  conditions,  we  shall 
make  the  working  man  over  new.  We  shall  develop 
in  him  an  alertness  of  mind,  an  active  looking  ahead, 
an  interest  in  all  legislation  and  social  conditions  that 
will  be  simply  incalculable  in  its  effects  upon  the 
soul. 

And  the  evil  influence  of  the  present  system  through 
immigration,  by  calling  in  the  people  of  the  lowest  and 
most  degraded  type  of  character,  because  they  will 
work  cheap  and  underbid  all  the  better  classes, — its 
effect  in  causing  race-suicide  among  all  the  better 
classes  (See  Chapter  IV), — shall  be  changed.  For 
when  we  once  begin  to  fix  wages,  not  according  to  the 
ability  of  men  to  work  cheap  and  to  degrade  themselves 
to  the  level  of  the  brute,  but  according  to  the  principle 
of  justice,  it  will  no  longer  be  possible  for  the  low  and 
unaspiring  to  underbid  and  drive  out  the  intelligent 
and  aspiring  classes.  And  competition  will  no  longer 
be  a  struggle  in  brutality  but  in  skill  and  true  elevation 
of  character. 


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EFFICIENCY    ATTAINED.  163 

And  the  adoption  of  our  plan  will  destroy  the  bale- 
ful influence  which  business  life  now  has  upon  the 
capitalist.  Our  present  system,  based  as  it  is  upon 
the  principle  of  organized  plunder,  compelling  men  to 
resort  to  bribery  and  deceit  and  cunning,  tends  to 
destroy,  in  the  princes  of  high  finance,  all  patriotism, 
and  true  public  spirit;  it  tends  to  make  them  in  busi- 
ness mercilessly  cruel,  and  violaters  of  all  law.  These 
charges  are  not  too  strong.  Now  the  adoption  of  our 
scheme  of  reform,  by  eliminating  forever  from  our  in- 
dustrial system  the  element  of  plunder,  and  introducing, 
and  making  supreme,  the  law  of  organized  comradship 
and  co-operation,  will  completely  reverse  this  evil 
influence  and  make  for  a  true  and  living  patriotism,  for 
sterling  uprightness  of  character  and  conduct,  for  re- 
spect for  law,  and  every  human  right,  and  it  will  unite 
all  men  in  a  true  comrade-ship  and  sympathetic  and  vital 
brotherhood  that  will  be  divine. 

And  every  one  can  see  that  the  adoption  of  our 
plan  will  transform,  in  time,  the  homes  of  the  poor. 
The  slums  will  disappear.  Our  cities  and  villages  will 
be  immeasurably  elevated  in  comfort,  in  sanitation,  and 
in  artistic  character. 

And  that  poverty  and  ignorance  and  that  constant 
toil  in  the  homes  of  the  poor,  which  now  place  such  an 
obstacle  in  the  way  of  the  best  effects  of  education, 
shall  be  removed.  Mothers,  no  longer  compelled  to 
work  in  the  factory,  nor  to  take  in  work,  to  make  a 
living,  will  give  their  time  and  strength  to  the  care  of 
their  children  and  the  neglected  child,  the  street  gang, 
and  all  its  evil  consequences  will  be  a  thing  of  the  past. 


164  EFFECTIVE    INDUSTRIAL    REFORM. 

Those  evil  influences  in  the  political  world,  resulting 
from  the  existence  of  a  vast  ignorant  irresponsible 
class  at  the  bottom  and  a  predaceous  corporation  at 
the  top,  will  be  entirely  eliminated  and  our  political 
life  shall  be  purified. 

Finally,  the  establishment  of  the  new  order  will 
exert  a  vast  direct  and  indirect  influence  upon  religion 
and  the  Church.  In  the  first  place,  it  will  bring  true 
religion  and  our  industrial  system,  for  the  first  time  in 
human  history,  into  essential  and  complete  harmony. 
To-day  they  are  directly  opposed  to  each  other,  and  no 
man  can  be  loyal  to  the  one  and  obey  the  behests  of 
the  other.  True  religion  says — "love  your  neighbor  as 
yourself."  And  this  is  to  be  not  a  mere  empty  emo- 
tion but  a  law  lying  at  the  very  basis  of  institutions 
and  laws.  But  the  present  industrial  system  says, — 
"Do  your  neighbor  while  he  sleeps."  "Mount  the 
steeps  of  wealth  by  trampling  on  the  necks  of  those 
below  you."  And  this  law  is  no  empty  thing.  It  is 
a  stern  command  which  every  man  must  obey  if  he 
would  succeed. 

Now,  the  introduction  of  our  plan  will  introduce  into 
the  Industrial  realm  that  sovereign  law,  that  grand 
principle,  which  lies  at  the  root  of  true  religion,  the 
sovereign  law  of  love. 

And  the  adoption  of  our  plan  will  tend  indirectly 
to  purify  religion  of  its  many  imperfections — of  its 
spiritual  despotism  which  still  prevails,  its  sectarian 
division,  and  its  emphasis  of  non-essentials.  And  it 
will  tend  to  unite  the  whole  race  in  one  living  Church, 
whose  creed  shall  be  Truth,  Justice,  and  Mercy,  with 


EFFICIENCY    ATTAINED.  165 

faith  in  God,  and  whose  aim  shall  be  to  unite  the  whole 
race  in  One  great  family,  bound  together  by  the  law 
of  love  and  co-operation  and  establish  on  earth  a  uni- 
versal peace. 

3. 

In  conclusion,  I  would  say  that  it  can  be  shown  that 
this  plan  of  economic  reform,  which  we  shall  apply  to 
the  Industrial  world,  can  be  applied,  to  advantage,  step 
by  step  to  every  other  realm  until  the  whole  plant  of 
civilization  is  brought  under  the  management  of  the 
same  efficient  Business  Corporation  directed  by  the  sov- 
ereign will  of  the  people. 

That  this  plan  could  be  thus  applied  to  every  other 
realm  is  seen  at  a  glance.  For  when  once  the  people 
shall  have  organized  themselves,  by  law,  into  a  Business 
Corporation  to  own  and  manage  their  industrial  affairs, 
they  could  easily  vote,  to  assume  ownership  and  con- 
trol over  Medicine  and  Sanitation,  by  voting  to  build, 
own,  and  equip  their  own  hospitals  and  provide  for  them- 
selves their  own  corps  of  physicians  and  nurses.  These 
should  be  placed  on  a  salary — all  fees  going  into  the 
public  treasury — and  they  should  constitute  an  expert 
Board  of  Health  for  the  community. 

The  funds  needed  to  build  and  equip  these  public 
hospitals  could  be  secured  by  appropriations,  or  they 
could  be  incorporated  with  the  funds  needed  to  capital- 
ize the  industrial  world  and  so  raised  by  subscription. 

The  people  could  vote  to  bring  the  legal  profession 
under  the  same  plan,  converting  the  lawyer  into  a  public 
official.  He  would  then  be  placed  on  a  salary;  and  his 
function  should  be,  not  to  prove  this  side  or  that,  in 


166  EFFECTIVE    INDUSTRIAL    REFORM. 

any  given  case,  to  be  true,  but  to  find  and  so  present 
the  evidence,  on  both  sides,  that  the  Jury  could  render 
a  just  judgment.  All  fees  should  go  into  the  public 
treasury. 

The  people  could  vote  to  apply  the  same  plan  to 
the  public  school  and  to  government — by  capitalizing 
them,  if  desirable,  and  fixing  all  salaries,  by  the  same 
method  as  in  the  industrial  world. 

And  here  I  desire  to  say,  in  parenthesis,  that  politics 
and  statesmanship  should  be  elevated  into  a  profession. 
Schools  should  be  created  fitting  men  for  such  a  profes- 
sion and  no  man  should  be  permitted  to  be  a  candidate 
for  any  high  office  in  city,  state,  or  nation,  unless  he 
could  show  a  certificate  of  a  three  or  four  years'  course 
of  study  in  these  schools  and  had  passed  a  satisfactory 
examination  at  the  close.  We  require  an  eductional 
qualification  of  all  candidates  for  teaching,  medicine, 
law  and  preaching.  Much  more  should  such  a  quali- 
fication be  required  of  every  candidate  for  city  council, 
state  or  federal  legislature  and  every  other  important 
government  office.  In  no  other  way  can  we  make 
government  truly  representative  and  efficient. 

Finally,  when  the  moral  and  religious  ideas  and 
aims  of  the  people  are  sufficiently  elevated  and  unified 
to  enable  the  people  to  organize  themselves  by  law  into 
one  church  Universal,  to  teach, — not  this  religion  nor 
that, — but  Righteousness  and  the  fear  of  God,  even  the 
Church  could  be  brought  under  the  same  great  plan. 
This  would  mean  that  the  churches  should  be  capital- 
ized and  all  salaries  paid,  by  the  same  method  as  in 
the  industrial  world.     But  I  cannot  enlarge  on  this  now. 


EFFICIENCY    ATTAINED.  167 

If  my  plan  were  thus  applied  to  the  whole  plant  of  Civ- 
ilization, it  would  result  in  immeasurable  good  for  the  race. 

For,  first,  it  would  abolish  all  despotic  power  from 
the  earth,  make  the  people  supreme,  and  enthrone 
democracy  in  everything. 

It  would  abolish  taxation,  and  instead,  it  would 
cause  the  whole  plant  of  Civilization  to  be  capitalized 
by  calling  upon  the  people  individually  to  subscribe 
and  invest  each  his  quota  of  the  required  amount. 
And  on  the  capital,  thus  subscribed,  we  would  pay 
dividends  to  the  full  earning  capacity  of  the  plant  of 
Civilization. 

It  would  make  all  workers  of  hand  and  brain  in 
every  vocation,  both  employers  and  employees  of  the 
same  public  Corporation.  It  would  place  all  on  a 
salary  fixed  by  the  public  commissioners  on  wages  and 
salaries.  Hence,  all  gouging  on  the  one  hand,  and  all 
underpaying  on  the  other,  would  cease;  and  all  men  in 
every  vocation  would  enjoy  equal  opportunity  to  ac- 
quire wealth. 

Finally,  it  can  be  shown  that  this  universal  appli- 
cation of  my  plan  would  bring  efficiency  into  every 
realm  to  which  it  was  applied — into  Medicine  and  Sanita- 
tion, Education,  Government  and  Morality  and  Religion. 

But  I  cannot  discuss  these  themes  in  this  book. 
Suffice  it  to  say  that  the  fact  that  this  plan  can  be 
applied  to  advantage  to  the  whole  plant  of  civilization, 
the  fact  that  it  will  bring  efficient  Democracy,  the  grand 
goal  of  human  progress,  into  every  social  function,  is 
an  additional  reason  why  we  should  introduce  it  now 
into  the  industrial  world  and  make  it  a  success  there. 


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Part  IV.     Concluding  Topics. 

CHAPTER  XII. 

THE  TRUE  SOCIALISTIC  PROGRAM. 

One  of  the  marvelous  and  yet  least  understood 
movements  of  modern  times  is  socialism.  Although  the 
socialistic  party  is  still  small  in  the  United  States,  yet 
the  principles  of  socialism  are  spreading  everywhere  and 
are  destined  to  conquer  the  world. 

In  the  study  of  socialism,  we  must  distinguish  be- 
tween the  principles  for  which  it  stands  and  those 
crude  notions  and  often  violent  measures  which  ac- 
company it.  Already  the  crudities  which  attended  its 
birth  are  falling  away  and  socialism  is  beginning  to 
appear  before  the  world  in  grand  simplicity  as  one  of 
the  strongest  and  best  movements  for  the  amelioration 
of  human  wrongs  and  the  development  of  human  society 
that  has  ever  appeared  in  human  history.  It  seems 
to  be  the  final  effort  which  the  race  is  to  make  to  over- 
throw every  wrong  and  to  establish  universal  justice 
and  good  will  on  earth. 

Viewed  as  a  reform  movement,  socialism  means 
organized  co-operation  on  the  part  of  the  people,  in 
constructing  a  just  society  on  earth  and  all  that  that  im- 
plies. Its  aim  is  identical  with  that  of  the  Mosaic  and 
Christian  faith,  only  it  operates  from  the  standpoint  of 
reason,  they  from  the  standpoint  of  religion, — if  it  is 
proper  to  make  such  a  distinction. 

Viewed  as  a  regulative  and  constructive  law  operat- 
ing within  society,  socialism  means  organized  co-opera- 


THE    TRUE    SOCIALISTIC    PROGRAM.  169 

tion  on  the  part  of  the  people  directed  by  their  own 
sovereign  will,  in  maintaining  justice  between  man  and 
man,  in  promoting  the  welfare  of  all,  and  performing 
our  common  functions.  It  believes  that  if  men  would 
unite  and  work  together  by  some  adequate  method, 
for  the  common  good,  there  is  scarcely  any  limit  to  be 
set  to  human  development  and  happiness. 

Socialism,  therefore,  embraces  two  grand  principles, 
First,  a  belief  in  justice  and  every  other  good  thing, — 
prosperity,  wealth,  education,  refinement  and  religion, — 
for  the  whole  people.  And,  second,  the  belief  that  these 
things  can  be  attained  only  through  a  wise  and  efficient 
Democracy. 

These  principles  are  not  new.  Socialism  differs 
from  all  movements  that  have  gone  before,  in  the 
intensity  with  which  it  has  grasped  these  principles, 
the  importance  which  it  attaches  to  them,  and  the 
abandon  with  which  it  has  staked  all  on  their  accept- 
ance. Socialism  believes  that  justice  for  the  whole 
people  is  dictated  not  only  by  the  principles  of  moral- 
ity but  the  highest  self-interest.  It  believes  with  ter- 
rible intensity,  that  there  can  be  no  permanently  safe  and 
prosperous  condition  of  society  except  as  it  is  founded 
on  the  law  of  justice,  education  and  equal  opportunity 
for  the  whole  people.  It  believes  that  for  any  society  to 
build  on  any  other  principle  is  to  build  on  sand  and 
such  a  society  must  come  quickly  to  ruin.  It  believes, 
in  the  second  place,  that  the  only  instrument  adequate 
to  attain  these  ends  is  a  thorough-going  Democracy, — 
or  the  organized  co-operation  of  the  whole  people  direct- 
ed by  their  own  sovereign  will. 


170  EFFECTIVE    INDUSTRIAL    REFORM. 

It  is  equally  opposed  to  anarchism,  on  the  one  hand, 
and  to  despotism,  on  the  other. 

It  believes  that  the  only  safe  guardians  of  the 
people's  rights  are  the  people  themselves, — but  the 
people  organized  by  law  into  a  single  co-operative 
body. 

It  believes  that  whenever  any  institution  or  social 
organization  makes  for  injustice,  or  fails  to  promote 
the  welfare  of  the  whole  people,  it  is  the  duty  of  the 
people,  to  introduce  such  a  reform  as  in  their  judge- 
ment will  promote  justice  and  the  happiness  of  all. 

Socialism  believes  that  to-day  our  industrial  system 
in  these  United  States  does  not  make  for  justice  nor 
for  the  good  of  the  whole  people;  and,  therefore,  that 
it  must  be  transformed  into  something  that  will  more 
perfectly  work  for  these  ends. 

Standing  for  these  principles,  socialism  is,  indeed, 
the  greatest  and  best  movement  in  modern  times.  It 
seems  to  have  come  to  call  Christianity  back  to  its 
original  and  divinely  given  aim.  And  Christianity 
shall  stand  or  fall  according  as  it  does  or  does  not  ally 
itself  with  socialism. 

Socialism  is  no  new  thing  in  the  world,  and  especially 
in  the  United  States, — though  it  has  for  the  first  time 
come  to  self-consciousness.  Socialism,  as  a  matter  of 
fact,  is  a  principle  lying  at  the  foundation  of  every  good 
thing  in  American  civilization. 

The  American  government,  based  upon  the  affirma- 
tion of  the  equal  rights  of  man,  maintained  by  organ- 
ized Union  and  co-operation,  directed  by  the  sovereign 
will  of  the  whole  people, — is  political  socialism  of  the 


Charles  Edward   Russell 

A   widely-read    Magazine   writer.      Author   of    "The    Greatest 
Trust  in  the  World,"  and  other  books.     An  active  socialist. 


Robert   Hunter. 

Lecturer    and    Writer.      Author    of    two    important    books- 
" Poverty"  and  "Socialists  at  Work."    An  active  socialist. 


THE    TRUE    SOCIALISTIC    PROGRAM.  171 

purest  and  simplest  kind.  And  our  Educational  sys- 
tem, recognizing  the  right  of  every  child  to  an  adequate 
education,  maintained  by  the  co-operation  of  all  the  peo- 
ple, directed  by  the  sovereign  will  of  the  people,  is  the 
very  embodiment  of  organized  socialism  in  the  realm 
of  Education.  And  our  Mailing  system  is  pure  social- 
ism in  its  foundation. 

And  now  socialism  is  seeking  with  indomitable 
energy  to  introduce  its  principles  into  the  industrial 
and  commercial  world.  When  it  shall  have  accom- 
plished this,  it  believes  that  the  millenium  will  be  nigh 
and  the  sorrows  of  the  people,  arising  from  oppression 
and  wrong  will  be  nearly  over. 

But  socialism,  here  faces  a  great  problem,  which  I 
do  not  think  it  has  yet  solved:  It  is  this.  What  is  the 
method  by  which  the  whole  industrial  realm  can  be 
properly  reconstructed  and  socialized?  What  is  the 
true  socialistic  program  or  method  in  the  Industrial 
world  ? 

It  is  this  problem  which  I  shall  now  discuss. 
2. 

When  industrial  socialism  began,  it  sought  by  mere 
voluntary  co-operation — by  the  formation  of  co-opera- 
tive stores,  factories  and  so  forth, — to  attain  the  end 
which  it  desired.  But  after  repeated  trials,  great  dis- 
appointments and  heartaches,  it  found  that  such  methods 
were  impracticable  and  it  wisely  discarded  them. 

Then  came  the  great  book  of  Karl  Marx — Das 
Kapital — which  has  become  the  Bible  of  the  European 
socialist.  He  showed  that  in  order  to  cure  present 
wrongs  the  people  must  operate  through  the  govern- 


172  EFFECTIVE    INDUSTRIAL    REFORM. 

ment  and  organize  themselves  by  law,  into  a  great 
industrial  commonwealth.  His  principles  were  rapidly- 
accepted  by  nearly  the  whole  socialistic  party.  And  a 
certain  method  was  developed  by  his  disciples  based 
upon  the  principles  which  he  taught,  which  may  be 
appropriately  called,  the  method  of  Marxian  Socialism. 

But  is  this  method  correct?  Does  it  discover  the 
key  by  which  to  organize  the  people  into  a  great  indus- 
trial commonwealth  under  forms  of  law?  Does  it 
present  the  true  socialistic  program? 

Now  while  Marx  made  a  great  advance  upon  his 
predecessors  and  was  right  in  affirming  that  public 
ownership,  in  order  to  be  successful,  must  embrace  all 
the  people  and  must  be  introduced  and  maintained  by 
law,  nevertheless  the  details  of  the  method  which 
his  followers  have  advocated,  are  crude  and  imprac- 
ticable and  can  never  obtain  the  general  assent  of  the 
people.  Indeed  it  is  the  crudity  of  these  methods  iden- 
tified with  Socialism  that  stands  to-day  as  the  chief 
obstacle  in  the  way  of  the  complete  triumph  of  the 
socialistic  movement.  Let  us  then  briefly  unfold  the 
essential  features  of  the  Marxian  method  of  industrial 
reform. 

Marx  diagnosed  the  cause  of  present  industrial 
wrongs  as  lying  in  the  use  of  capital,  or,  in  "capitalism." 
For  the  fundamental  doctrine  of  Marx  was  that  capital 
was  essentially  and  necessarily  predaceous.  It  was 
always  a  device  used  for  spoliation.  Hence  all  inter- 
est, profits,  rents,  and  dividends  were  but  the  plunder 
which  capital  exacted  from  labor.  Marxianism  also 
affirmed  that  the  wage   system  was  the   daughter  of 


THE    TRUE    SOCIALISTIC    PROGRAM.  173 

capital  and  was  used  also  as  the  instrument  of  spolia- 
tion; for  it  was  employed  by  capital  to  enable  it  to 
pay  labor  barely  sufficient  to  keep  the  laborer  from 
starvation  and  then  appropriate  the  surplus  in  the 
form  of  dividends  or  rents  or  profit. 

Hence,  Marx  affirmed  that  the  only  cure  of  the  evils 
of  the  present  system  lay  in  the  abolition  of  all  use  of 
capital,  or,  the  principle  of  "capitalism,"  with  its 
daughter  the  wage  system,  from  the  industrial  world. 
And  he  constantly  endeavored  to  construct  a  system 
from  which  the  use  of  capital  would  disappear,  root 
and  branch.  His  system,  in  its  purity,  embraced  the 
following  factors.  First,  the  collective  ownership  of 
all  the  agents  of  production,  or,  the  public  ownership 
of  each  industrial  and  commercial  plant.  This  was  the 
fundamental  factor  in  his  scheme.  Then,  to  escape  all 
exploitation  in  the  matter  of  wages,  he  adopted  the 
plan  of  paying  labor  in  time-checks,  common  labor 
being  the  unit  and  skilled  labor  being  paid  in  multiples 
of  common  labor.  His  next  feature  was  the  payment 
of  all  commodities  in  these  time-checks,  the  price  of 
each  thing  being  fixed  by  the  amount  of  labor  used 
in  its  production.  Thus  he  would  escape  all  exploita- 
tion and  plunder  in  the  matter  of  prices.  Finally,  all 
use  of  capital  in  the  future  was  to  be  abolished.  But 
how  was  this  to  be  achieved?  How,  without  the  use 
of  capital,  was  the  public  to  come  into  possession  of  all 
the  agents  of  production  now  owned  by  individuals, 
and  how  was  it  to  make  repairs  and  engage  in  new 
enterprises  in  the  future?  The  reply  of  Marxianism  to 
this  inquiry  was  very  simple.     Since  all  private  owner- 


174  EFFECTIVE    INDUSTRIAL    REFORM. 

ship  of  the  instruments  of  production  has  been  the 
product  of  plunder,  the  people  have  the  right  simply 
to  take  possession  of  them  without  paying  anything 
for  them,  just  as  a  slave  has  the  right  to  acquire  his 
freedom  without  paying  his  master  any  price  for  his 
liberty.  When  repairs  had  to  be  made  or  new  enter- 
prises inaugurated  in  the  future,  men  would  be  set  to 
work  to  make  them,  and  they  would  be  paid  for  their 
services  in  time-checks  to  be  exchanged  for  the  com- 
modities of  the  country.  Thus  all  use  of  capital  would 
be  abolished  and,  with  it,  all  injustice  and  wrong. 
The  laborer,  the  sole  producer,  would  receive  for  the 
first  time  in  history  the  full  product  of  his  toil. 

Such  are  the  fundamental  principles  of  Marxianism, 
which  its  adherents  declare  to  be  pure  socialism.  They 
call  the  present  industrial  system  a  "capitalistic" 
system,  and  say  that  it  must  ultimately  be  displaced 
by  Marxianism  or  socialism. 

The  followers  of  Marx  have  seen  that  these  prin- 
ciples could  not  be  fully  introduced  at  once  if  at  all. 
There  has  been  also  an  unconscious  modification  of 
some  of  these  factors.  And  the  following  may  be  given 
as  expressing  the  present  concrete  program  which 
Marxianism  advocates. 

First,  the  public  ownership  of  the  plant,  just  as  I 
have  maintained  in  this  book. 

Second,  the  capital  to  be  raised  where  necessary 
out  of  the  wealth  of  the  country  or  by  taking  it  out  of 
the  business  as  we  go  along.  Wise  tactics  may  dictate 
the  paying  of  the  present  owners  for  their  "property," 
when    we    acquire    public    ownership    of    it.     But    the 


THE    TRUE    SOCIALISTIC    PROGRAM.  175 

money  used  for  this  purpose  shall  be  raised  by  a  tax 
on  the  wealth  of  country.  In  no  case  shall  any  man 
be  allowed  to  subscribe  it  or  in  any  wise  earn  a  dividend 
or  interest  or  rents  or  profit  out  of  the  public  industries. 
Indeed,  should  Marxianism  be  fully  adopted,  no  man 
would  be  able  anywhere  to  invest  his  savings  for  the 
earning  of  dividends  or  profit  of  any  kind.  All  men 
would  be  reduced  to  the  level  of  capitalless  working 
men.  Let  Marxianism  be  once  fully  introduced  and 
immediately  every  man  would  be  compelled  to  with- 
draw all  his  savings  from  the  savings  bank  and  ever 
other  place  where  he  had  invested  them.  He  could 
lay  them  by  in  his  stocking,  if  he  chose,  but  he  could 
never  invest  them  for  the  earning  of  dividends. 

It  follows,  therefore,  that  in  the  Marxian  system 
the  whole  earnings  of  our  industrial  activities  will  be 
paid,  (after  taking  out  the  necessary  reserve  fund  for 
repairs  and  new  enterprises),  in  the  form  of  wages  to 
labor.  All  distinction  between  the  wages  earned  by 
labor  and  the  dividends  earned  by  capital  will  disappear. 
The  whole  income  coming  to  each  man  will  come  in  the 
form  of  wages,  and  of  wages  alone. 

It  follows  that  the  moment  that  a  man  at  any 
time  quits  work  his  whole  income  will  cease.  No 
matter  how  hard  a  man  may  have  worked  through 
all  his  earlier  years,  the  moment  he  stops  work  his 
income  ceases.  It  will  not  be  possible  for  a  man,  no 
matter  how  hard  he  may  work,  to  save  and  invest  his 
savings  for  a  future  income. 

Third.  Marxianism  has  seen  with  others  that  in 
abolishing  all  possibility  of  earning  an  income  except 


176  EFFECTIVE    INDUSTRIAL    REFORM. 

as  the  immediate  fruit  of  work,  it  has  destroyed  the 
possibility  of  any  man's  making  any  provision  for 
extended  sickness,  or  severe  accident,  or  old  age,  say 
nothing  about  leisure  in  after  life.  How,  then,  has 
Marxianism  proposed  to  provide  for  these  contingences? 
Marxianism  has  always  been  somewhat  vague  and 
uncertain  in  speaking  on  these  points.  But  two 
methods  have  been  proposed ;  the  first  is  that  of  pensions 
for  old  age;  the  other  is  that  of  compulsory  insurance 
for  sickness  and  accidents,  and  compulsory  annuities 
for  old  age.  The  old  age  pension  recently  voted  by 
parliament  in  England  is  the  fruit  of  this  Marxian  prin- 
ciple.    It  is  a  Marxian  measure. 

Such  are  the  essential  principles  of  Marxian  social- 
ism and  such  are  the  essential  features  of  its  program 
of  industrial  and  commercial  reform.  It  is  easy  to 
grasp  its  grand  outlines  and  see  what  it  is  like. 

Marxianism  is  identical  in  structure  with  govern- 
ment ownership  as  exemplified  in  the  United  States 
Mail.  For  the  United  States  mail  is  pure  government 
ownership,  and  it  performs,  economically  viewed,  two 
functions  and  two  only. 

First,  it  provides  work  for  the  people  at  a  fair  or 
just  wage.     At  least  it  can  do  this. 

Secondly,  it  supplies  the  people  with  a  needed  utility 
or  service,  at  a  fair  price. 

But  this  is  all  that  it  does.  It  does  not  provide 
the  people  with  a  place  where  they  can  invest  their 
savings  and  earn  a  dividend.  It  does  not  aim  to  per- 
form this  function.  Hence,  the  capital  used  in  the 
United    States    mail   is   not    raised   by   the    individual 


THE    TRUE    SOCIALISTIC    PROGRAM.  177 

subscriptions  of  the  people.  It  is  raised,  by  taking  it 
indirectly  from  the  people,  by  taking  it,  in  short,  "out 
of  the  business."  Thus  all  investment  of  savings  in 
the  United  States  mail  for  the  earning  of  dividends  is 
entirely  cut  off. 

Now  Marxianism  would  organize  our  whole  indus- 
trial and  commercial  activities  after  the  same  plan. 
All  would  be  turned  over  to  the  government — a  special 
autonomous  department  would  be  created  for  the  pur- 
pose. And  all  our  industries — Manufacturing,  Agricu- 
ture,  Transportation,  Telegraphs  and  Telephones, — 
would  be  placed  upon  the  same  basis  as  the  United 
States  Mail.  The  capital  would  be  raised,  in  every 
case,  by  "taking  it  out  of  the  business."  And  while 
they  would  supply  all  with  work  at  a  just  wage,  and 
provide  all  with  all  needed  utilities  at  a  just  price,  yet 
all  possibility  of  investing  one's  savings  anywhere  for 
the  earning  of  dividends  and,  therefore,  all  acquisition 
of  individual  wealth,  would  be  forever  cut  off.  And 
it  will  cut  off  this  possibility,  deliberately,  on  the  ground 
that  all  investment  of  savings  for  dividends  is  wrong. 

3. 

If  now  we  have  a  just  conception  of  the  Marxian 
plan  of  reform,  we  are  prepared  to  ask, — Will  it  work? 
Will  it  meet  all  our  economic  needs?  Is  it  the  true 
Socialistic  program? 

Karl  Marx  was  right  in  his  fundamental  affirmation, 
that  all  our  industrial  and  commercial  activities  must 
be  owned  and  controlled  by  the  sovereign  will  of  the 
people, — that  the  mere  voluntary  co-operative  efforts  of 
the  earlier  socialism  were  inadequate.     He  was  right  in 


178  EFFECTIVE    INDUSTRIAL    REFORM. 

saying  that  the  great  instruments  of  production,  the 
great  industrial  plants,  must  be  owned  collectively  by 
the  whole  people.  He  was  right  in  his  condemnation 
of  the  method  of  determining  wages  and  salaries  by 
competition.  He  was  right  in  saying  that  every  man 
should  receive  the  full  product  of  his  labor,  and  that, 
therefore,  the  wages,  so-called,  of  each  man  should  be 
fixed  rationally  according  to  the  principle  of  justice. 
In  all  these  affirmations  he  laid  the  foundations  of  a 
true  Socialism.  But  his  system  in  other  respects  was 
marked  by  grave  errors.  And  these  must  be  corrected 
before  we  can  have  the  true  Socialistic  method. 

In  the  first  place,  Marx  was  fundamentally  wrong 
in  his  conception  of  the  nature  and  use  of  Capital. 
And  this  led  him  into  error  in  regard  to  dividends, 
profits  and  rents. 

Karl  Marx  viewed  Capital  as  essentially  predatory. 
It  was  to  him  the  instrument  used  only  to  exploit 
labor.  Hence,  his  constant  aim  was  to  devise  a  system 
by  which  as  he  hoped, — but  vainly  hoped,  as  we  shall 
see, — to  abolish  all  use  of  capital  or  "capitalism"  as 
it  was  called  from  the  Industrial  world. 

But  Capital  or  "Capitalism"  is  not  a  device  always 
used  to  exploit  labor.  Neither  is  it  possible  to  abolish 
it.  Marx's  system  creates  and  employs  capital  as  much 
as  any  other  system.  For  Capital  is  nothing  more 
than  a  utility  saved  to  aid  labor  in  the  production  of 
other  utilities  in  vaster  quantities  and  with  less  effort 
than  is  possible  by  the  use  of  labor  alone.  And  the 
use  of  capital  lies  at  the  very  basis  of  all  civilization 
and  human  progress. 


THE    TRUE    SOCIALISTIC    PROGRAM.  179 

The  first  man  on  earth  who,  instead  of  eating  all 
the  wheat  he  had  gathered  in  its  wild  state,  saved  a 
portion  of  it  and  sowed  it  in  the  earth  to  produce  a 
new  crop  for  him,  was  a  capitalist.  The  grain  which 
he  saved  and  sowed  in  the  earth  and  thereby  made  it 
work  for  him  was  his  capital.  The  primitive  man  who, 
instead  of  killing  and  eating  the  cow  which  he  had 
captured,  corralled  her  and  made  her  work  for  him  by 
producing  milk  and  butter  and  calves  for  his  use,  was 
a  capitalist.  The  cow  which  he  saved  and  used  was 
his  capital;  it  was  the  product  of  past  toil,  and  it 
was  saved  for  the  purposes  of  gain.  The  man  who  first 
cut  down  a  tree  and  hollowed  it  out  into  a  boat  and 
flung  up  a  sail  against  a  mast  making  the  winds  work 
for  him,  was  a  capitalist.  The  labor  put  into  his  boat 
and  sail  was  his  capital,  and  he  was  using  it  for  future 
profit. 

This  power  to  acquire  capital  and  invest  it  or  use 
it  for  future  gain  is  one  of  the  fundamental  rights  of 
man  and  lies  at  the  very  foundation  of  civilization. 
A  man  has  no  right  to  enslave  his  fellow  men  and  force 
them  to  work  for  him  without  adequate  compensation. 
But  he  has  the  right  to  master  the  forces  of  nature 
to  their  fullest  extent,  and  make  them  work  for  him 
to  their  full  capacity.  It  is  entirely  incorrect,  there- 
fore, to  say  that  Capitalism  is  in  itself  wrong.  Capi- 
talism, or  the  use  of  capital,  like  civil  government,  may 
be  right  or  wrong  according  to  the  use  that  is  made  of 
it.  Civil  government  may  be  made  the  instrument  of 
a  grinding  tyranny,  and  it  may  be  made  the  instrument 
by  which  a  free  people  can  defend  their  liberties  pro- 


180  EFFECTIVE    INDUSTRIAL    REFORM. 

mote  the  general  welfare  and  preserve  peace.  So  also 
the  use  of  capital,  when  owned  and  exploited  by  a 
few  irresponsible  despots,  may  be  used  as  the  agent 
of  a  grinding  despotism,  but  it  can  also  be  used,  when 
owned  by  all  the  people,  as  the  agent  for  the  cure  of 
poverty  and  for  the  acquisition  of  individual  wealth 
with  justice  toward  all.  What  we  want,  therefore,  in 
order  to  reform  present  abuses  is  not  the  abolition  of 
capital  but  such  a  collective  control  of  our  vast  utilities 
as  to  bring  justice  to  all.  .  But  if  it  is  not  wrong  to 
save  and  use  capital  for  the  production  of  wealth,  it 
is  not,  therefore,  wrong  to  earn  a  just  interest  or  divi- 
dend on  one's  capital.  Neither  is  it  wrong  to  earn  a 
just  rent  on  the  use  of  one's  house  or  land.  What  is 
wrong  in  this  matter  is  to  get  control  of  some  one  else's 
capital  and  rob  him  of  his  dividends;  or  to  get  posses- 
sion of  some  one  else's  house  and  rob  him  of  his  rent. 
Or  to  get  such  a  grip  upon  the  poor  as  to  charge  an  un- 
just interest  or  an  unjust  rent. 

4. 

Furthermore,  not  to  pay  dividends  is  robbery. 

To  make  this  point  perfectly  plain,  let  us  make  use 
of  an  illustration. 

Let  us  suppose  that  Mr.  Brown  and  Mr.  Smith  go 
into  business  together — that  of  raising  beeves.  Mr. 
Brown  and  Mr.  Smith  represent  the  public.  And  let 
us  suppose  that  by  faithful  labor  they  can  raise  and 
add  to  their  stock  each  year,  twelve  beeves  per  man. 
Then  it  is  evident  that  one  beef  per  month  is  exactly 
what  each  man's  labor  is  worth.  And  if  each  man 
is  to  receive  "the  full  product  of  his  labor,"  then  each 


Rev.  John  D.  Long. 

Pastor  of   Parkside   Church,   Presbyterian,   Brooklyn, 

New  York.     Active  leader  in  the  Christian  Socialist 

Fellowship  Movement. 


Mr.  Geo.  H.  Strobell. 
Elder  in  the  Presbyterian  Church.     Business  man  of 
Newark,  N.  J.     Author  of  An  Address — "A  Christian 
View  of  Socialism,"  and  active  in  the  Christian    So- 
cialist Fellowship    Movement. 


THE    TRUE    SOCIALISTIC    PROGRAM.  181 

man's  wages  should  be  just  one  beef  per  month.  Let 
us  suppose  that  this  wage  is  settled  upon  and  they  go 
to  work  on  that  basis.  It  is  evident  that  each  man 
should  receive  just  one  beef  for  every  month  of  work. 
And  if  he  works  twelve  months  in  the  year,  he  should 
receive  twelve  beeves  for  his  years  work. 

But  let  us  now  make  another  supposition.  Let  us 
suppose  that  it  requires  only  ten  beeves  to  support  a 
man  and  .his  family  each  year.  Then  it  is  evident  that 
each  man  by  working  a  whole  year  can  earn  two  beeves 
more  than  he  consumes,  and  these  can,  if  he  so  chooses, 
be  saved  up  for  a  rainy  day  or  old  age. 

Let  us  suppose  that  Mr.  Brown  does  this.  He 
works  a  whole  year  but  consumes  only  ten  beeves; 
and  at  the  end  of  the  year  he  says, — "I  will  not  take 
out  my  two  remaining  beeves  now,  but  will  let  them 
remain  in  the  herd  until  a  later  date."  Let  us  suppose 
that  he  does  this  for  twenty  years, — working  twelve 
months  each  year  but  taking  out  of  the  stock  only  ten 
beeves,  or  the  pay  for  the  ten  month's  labor,  how  much 
then  does  the  stock  concern,  the  public,  owe  him  at 
the  end  of  the  twenty  years? 

At  the  end  of  the  twenty  years  the  Public  owes  him, 
of  course,  (1)  the  forty  head  of  cattle  which  he  has  not 
taken  out ;.  but  it  owes  him  also  (2)  all  the  natural  increase 
on  these  cattle  over  and  above  the  cost  of  caring  for 
them. 

Now  after  paying  for  all  the  direct  and  indirect 
labor  of  caring  for  these  cattle,  at  the  rate  of  one 
beef  per  month  to  each  man  so  employed, — which  is, 
we   have   agreed,  a   full  wage  for  labor, — the   natural 


182  EFFECTIVE    INDUSTRIAL    REFORM. 

increase  on  these  cattle  will  be  about  that  of  doubling 
themselves  every  four  or  five  years.  At  this  rate  the 
natural  increase  on  these  head  of  cattle  which  he  has 
saved,  year  by  year,  will  amount  at  the  end  of  the 
twenty  years,  to  say  300  heads,  worth,  say  $12,000. 

I  hold,  therefore,  that  what  the  stock-corporation 
or  the  Public  owes  this  man  at  the  end  of  the  twenty 
years,  is  not  only  the  forty  heads  which  he  has  saved 
from  his  wages,  year  by  year,  but  these  30j3  heads 
besides,  or,  the  natural  increase  on  his  savings,  making 
all  together  340  heads. 

And  yet  Marxian  Socialism  would  pay  the  man 
only  his  forty  heads,  leaving  a  surplus  to  the  public 
of  300  heads,  which  are  really  his,  indeed  as  truly  his 
as  the  40  heads  which  have  been  given  to  him.  Marx- 
ian Socialism  therefore  instead  of  doing  as  it  aims  and 
claims  to  do,  namely  to  pay  each  man  the  full  propor- 
tion of  his  earnings,  would  in  reality  be  robbing  him 
of  300  heads  of  cattle  or  $12,000.  And  this  would  be 
as  real  a  robbery  as  is  now  committed  by  the  plutocrat 
against  labor. 

But  Marxianism,  perhaps,  replies,  that  this  surplus 
or  increase  would  be  paid  back  to  each  man  in  the 
form  of  an  increase  of  wages  or  a  pension.  But  this 
would  not  save  the  injustice  of  the  transaction,  unless 
every  man  worked  equal  time  and  with  equal  efficiency 
with  every  other. 

For  let  us  assume  that  Mr.  Brown  labors  during  the 
full  twelve  months  each  year  for  the  twenty  years; 
but  let  us  suppose  that  Mr.  Smith  works  only  ten 
months  and  therefore  consumes  all  that  he  earns  as  he 


THE    TRUE    SOCIALISTIC    PROGRAM.  183 

goes  along,  what  will  be  the  result?  The  result  will  be 
that  the  only  surplus  saved  at  the  end  of  the  twenty 
years  will  be  the  surplus  resulting  from  Mr.  Brown's 
savings  or  the  300  head  of  cattle  arising  from  his  in- 
crease. But  Marxianism  will  divide  this  sum  year  by 
year  or  at  the  end  of  the  20  years  equally  between  Mr. 
Brown  and  Mr.  Smith.  Hence  Mr.  Brown  will  receive 
only  150  plus  40  heads  at  the  end  of  the  twenty  years, 
while  Mr.  Smith  will  receive  150  heads  alone,  or  nearly 
as  many  as  Mr.  Brown.  In  other  words  while  Mr. 
Smith  has  never  worked  more  than  ten  months  in  the 
year  and  has  consumed  all  that  he  has  earned  as  he 
went  along,  yet  at  the  end  of  the  twenty  years  he  re- 
ceives one-half  or  $6,000  of  Mr.  Brown's  savings.  What 
is  this  but  robbery?  And  whatever  method  or  com- 
bination we  may  pursue  injustice  will  result. 

In  truth,  there  are  three  economic  factors  entering 
into  every  man's  economic  relations.     They  are, — 

First,  The  amount  of  work  which  he  performs  for 
the  public.  Second,  the  amount  of  commodities  which 
he  consumes.  And  third,  the  amount  of  capital  which 
he  invests  in  his  country's  industries. 

These  three  factors  enter  into  every  man's  indus- 
trial-economic life. 

Now  the  only  way  to  insure  justice  to  each  man 
is  by  keeping  a  rigidly  separate  account  of  each- -of  these 
factors — that  is,  a  rigidly  separate  account  of  each 
man's  labor, — a  rigidly  separate  account  of  the  amount 
that  he  consumes, — and  a  rigidly  separate  account  of 
the  amount  of  the  capital  which  he  invests.  And 
then  pay  each  man  in  full  for  all  the  work  that  he  per- 


184  EFFECTIVE    INDUSTRIAL    REFORM. 

forms, — charge  him  justly  for  all  that  he  consumes, — 
and  pay  him  just  and  equal  dividends  on  all  the  capital 
that  he  has  invested. 

Now  this  is  what  we  shall  do  in  our  plan.  We 
shall  in  the  first  place  keep  a  strict  and  separate  account 
of  the  amount  and  the  value  of  each  man's  work  and 
pay  him  a  full  compensation  for  all  that  he  earns  and 
no  more.  Second,  we  shall  keep  an  account  of  all  that 
he  consumes  and  have  him  pay  for  all  that  he  consumes 
and  no  more.  And,  lastly,  we  shall  keep  a  strict  ac- 
count of  all  that  he  invests  and  pay  him  dividends  equal 
in  percentage  to  that  paid  to  every  other  man ;  indeed 
we  shall  pay  to  him  all  that  he  and  his  fellow-citizens 
can  make  our  common  industries  earn.  We  shall  thus 
bring  justice  into  our  whole  industrial  life  and  make 
our  industrial  organization  the  instrument  of  the  in- 
dividual acquisition  of  wealth. 

But  Marxianism  refuses  to  do  this.  It  refuses  to 
recognize  in  any  way  the  existence  of  capital.  It 
recognizes  the  existence  of  labor  alone  and  demands 
that  all  the  product  of  labor  and  capital  be  combined 
and  paid  to  labor  alone  in  the  form  of  wages.  But  in 
doing  this,  whatever  be  the  method  pursued,  it  will 
result  only  in  injustice  and  failure  in  meeting  the  needs 
of  man. 

5. 

Again  Marxianism  is  wrong  in  saying  that  Capital- 
ism, or  "the  individual  investment  of  savings  for  pri- 
vate gain,"  is  the  cause  of  present  evils. 

Marxianism  seeks  to  justify  itself  in  depriving  all  of 
the  right  to  invest  savings  for  the  earning  of  dividends, 


THE    TRUE    SOCIALISTIC    PROGRAM.  185 

by  saying  that  it  is  this  individual  investment  of  sav- 
ings for  gain  that  is  the  cause  of  all  present  evils.  But 
this  I  am  convinced  is  an  entirely  incorrect  diagnosis 
of  the  case.  The  cause  of  present  evils  lies  not  in  the 
fact  that  individuals  invest  their  savings  for  gain,  but 
in  the  fact  that  there  is  no  general  co-operation  in  the 
management  of  the  utilities  in  which  savings  are  in- 
vested. One  man  or  one  set  of  men  invest  in  one  thing 
and  another  man  or  set  of  men  invest  in  another  thing, 
and  still  another  man  or  set  of  men  invest  in  still  some- 
thing else  and  then  each  man  or  set  of  men  strives  to 
beat  all  the  rest.  The  result  is  that  society  is  plunged 
into  a  state  of  industrial  war  and,  as  a  result  of  this,  the 
few,  the  strong,  attain  to  positions  of  influence  and 
power,  and  oppress  and  rob  the  rest. 

And  to  cure  this  evil  it  is  not  necessary  to  deprive 
the  individual  of  the  right  to  save  and  invest  for  gain; 
but  we  must  combine  all  the  people  into  one  vast  cor- 
poration in  such  a  way  as  to  destroy  this  antagonism 
of  individual  interests,  take  away  the  unjust  power  of 
the  few  over  the  many,  and  enable  all  the  people  to  work 
together  in  one  single  producing  firm  in  maintaining  jus- 
tice and  promtoing  the  good  of  all.     This  is  Socialism. 

But  can  this  be  achieved  without  annihilating  the 
investment  of  individual  savings  for  individual  gain? 
It  certainly  can  as  we  have  seen.  It  is  done  every  day 
all  around  us  on  a  small  scale.  Every  corporation 
where  a  number  of  men  are  combined  in  business  is  an 
example  of  it.  Here  is  a  vast  shoe  concern  in  which 
twenty  men  are  combined  in  business.  Now  there  we 
have  an  example  of  a  group  of  men  pooling  their  com- 


186  EFFECTIVE    INDUSTRIAL    REFORM. 

mon  interests,  working  together  for  their  common  pro- 
fit. And  yet  each  man  retains  the  power  of  individual 
investment  of  savings  for  legitimate  gain.  For  each 
man  has  his  individual  capital  invested  in  the  com- 
mon business;  and  on  his  individual  capital  he  receives 
his  proper  dividends. 

But  if  a  small  group  of  men  can  thus  combine  and 
co-operate  to  their  common  advantage  and  yet  not 
destroy  the  individual  power  of  each  to  invest  for  gain, 
why  cannot  all  the  people  thus  combine  in  one  vast 
business  concern  or  corporation  for  the  purpose  of 
efficiency  in  production  and  justice  in  the  distribution 
of  wealth,  and  yet  allow  each  man  to  retain  his  individ- 
ual capital,  invest  it  in  the  common  business  and  reap 
his  proportionate  share  of  the  dividends?  They  cer- 
tainly can,  as  we  have  shown. 

In  order,  therefore,  to  achieve  public  ownership  and 
give  all  the  people  the  supreme  control  of  their  whole 
industrial  life,  it  is  not  necessary,  at  all,  to  annihilate 
the  power  of  the  individual  to  invest  his  savings  for 
the  purpose  of  gain.  For  as  each  member  of  the  private 
corporation  invests  his  capital  for  gain,  so  all  the  citi- 
zens in  the  public  corporation  can  invest  their  savings 
in  this  public  concern,  as  we  have  shown,  for  individual 
gain.     Indeed  this  is  our  plan. 

Marxianism,  therefore,  in  depriving  the  individual 
of  the  right  of  investing  his  savings  for  dividends,  does 
so  on  no  adequate  grounds,  indeed  on  no  grounds  at  all. 
In  doing  so,  therefore,  it  commits  a  great  wrong. 

The  Marxianism  method  of  curing  present  evils  is 
like  the  conduct  of  the  mother,  who  because  her  boys 


THE    TRUE    SOCIALISTIC    PROGRAM.  187 

quarrel  over  a  cake  which  she  has  given  them,  says — 
"Since  you  quarrel  over  this  cake  I  will  not  allow 
you  to  have  any  of  it  at  all," — and  straightway  de- 
prives them  of  the  cake.  What  the  world  wants  is  not 
to  be  deprived  of  the  power  of  individual  investment 
for  purposes  of  gain,  but  to  have  the  power  of  each 
amply  protected  so  that  each  shall  have  equal  power 
to  invest  with  every  one  else  and  shall  win  his  full  share 
of  the  dividends  earned  in  our  common  industrial  life. 
But  this  is  not  achieved  by  Marxianism.  Marxianism, 
therefore,  does  not  offer  the  true  solution  of  present 
evils. 

6. 

In  the  next  place,  the  Marxian  method  will  greatly 
weaken,  if  not  destroy,  the  essential  factor  of  individ- 
ualized responsibility  and  individual  self-help  which  we 
have  declared  to  be  so  important  to  any  successful 
Industrial  system.  For  Marxianism  by  annihilating  all 
individual  ownership  of  the  capital  and  all  earning  of 
dividends,  reduces  all  men  to  the  condition  of  capital- 
less  working  men,  like  those  irresponsible  members  at 
the  bottom  of  society  to-day.  It  thereby  cuts  the  chief 
nerve  of  individual  responsibility  and  destroys  the  chief 
stimulous  to  individual  energy  and  enterprise. 

It  is  a  fact  that  the  chief  factor  in  the  business 
world  creating  a  sense  of  responsibility  and  carefulness 
in  voting,  is  capital  invested  and  dividends  at  stake. 
Let  a  man  have  the  savings  of  years  invested  in  a  busi- 
ness and  he  is  going  to  look  after  that  business.  If  he 
has  any  power  of  voting  in  connection  with  it,  he  will 
be  careful  how  he  votes.     But  Marxianism  annihilates 


188         EFFECTIVE  INDUSTRIAL  REFORM. 

this  whole  factor.  It  calls  upon  no  one  to  subscribe  a 
cent  towards  the  capital,  and  allows  no  one  to  earn  a 
cent  of  dividends  from  the  business.  Men  will,  there- 
fore, feel  little  more  interest  or  responsibility  in  the 
industrial  affairs  of  the  community,  than  they  feel 
today  in  our  mailing  system,  and  that  is  practically 
nothing. 

This  evil  will  be  greatly  emphasized  by  the  pension 
system  which  Marxianism  advocates.  It  will  cut  the 
knot  of  individual  responsibility  for  the  future.  For 
let  us  look  at  the  system  for  a  little.  Marxianism,  hav- 
ing rigidly  abolished  all  investment  of  private  capital 
and  all  earning  of  dividends,  and  having  thereby  ren- 
dered it  impossible  for  any  one  to  make  any  provision 
for  future  needs  or  for  old  age,  has  substituted  in  their 
place  the  policy  of  pensioning  everybody  after  a  cer- 
tain age  has  been  reached  or  after  a  certain  term  of 
labor.  And  in  order  to  escape  the  interminable  frauds 
which  have  always  accompanied  the  pension  system 
it  will  rigidly  pay  to  everyone  the  same  fixed  amount, 
as  say  $500  a  year.  This  pension  will  be  paid  in  time- 
checks. 

Now  let  us  pause  and  think  for  a  moment  what  will 
be  the  inevitable  effect  of  such  a  system?  It  will  no 
doubt  prevent  any  man's  becoming  a  millionaire  by 
robbing  someone  else?  But  what  will  be  its  effect  upon 
labor?     What  upon  the  people  generally? 

Here  are  a  number  of  young  men  just  coming  of 
age, — active,  aspiring  and  eager  to  win  for  themselves 
a  competence  for  the  future?  But  as  they  eagerly 
seek  to  realize  their  aim,   Marxianism  comes  to  them 


THE    TRUE    SOCIALISTIC    PROGRAM.  189 

and  says — "Stop.  We  do  not  allow  you  to  engage  in 
a  single  enterprize  for  your  individual  gain  or  for  the 
gain  of  anybody  else.  The  Government  has  already 
provided  for  your  future.  You  are  to  work  until  you 
reach  the  age  of  forty- five.  When  you  arrive  at  that 
age  the  government  will  pay  you  a  pension  of  $500  a 
year;  or  rather  it  will  give  you  time-checks  representing 
2000  hours  of  work  per  year.  And  this  is  every  cent 
that  you  will  be  allowed  to  receive.  We  do  not  allow 
you  to  do  anything  whatsoever  to  increase  or  diminish 
this  sum.  To  attempt  to  do  so  will  be  a  misdemeanor 
to  be  punished  as  crime.  So  beware!"  What  system 
could  be  better  calculated  to  destroy  all  individual  en- 
terprise and  ambition  than  this? 

And  what  will  be  the  effect  of  this  pension  system 
on  the  indolent  and  inefficient?  Here  are  a  company 
of  such  just  coming  of  age  and  reluctantly  contemplat- 
ing the  years  of  labor  before  them.  But  soon  a  com- 
forting thought  occurs  to  them.  "All  we  have  to  do," 
— say  they — "is  to  manage  somehow  to  work  out  our 
twenty  years, — no  matter  how.  It  is  of  no  concern  of 
ours  whether  we  earn  our  salt  or  not.  Let  us  only 
succeed  in  getting  in  our  time,  and  then  at  the  end  of 
twenty  years,  we  become  the  wards  of  the  government, 
able  to  shuffle  it  with  the  best  of  them.  And  then 
there  will  be  no  more  thought  and  no  more  care.  All 
we  will  have  to  do  will  be  to  draw  our  pensions  and 
enjoy  life  with  no  more  responsibility  than  the  birds." 

Was  there  ever  a  system  invented  better  fitted  to 
encourage  deliberate  indolence,  shirking  and  ineffi- 
ciency than  this? 


190  EFFECTIVE    INDUSTRIAL    REFORM. 

But  some  one  asks — "Will  not  the  fact  that  the 
value  of  future  pensions  will  be  somewhat  affected  by 
the  quality  of  labor  now,  stimulate  men  to  earnest 
toil?  This  will  no  doubt  stimulate  the  more  industrious 
and  far-sighted?  But  it  will  result  in  great  injustice. 
For  suppose  that  the  industrious  few  do  work  hard  and 
thereby  cause  an  increase  in  production  who  will  bene- 
fit by  the  increase?  The  indolent  will  benefit  by  it  as 
fully  as  those  whose  labor  has  produced  it.  And  the 
indolent  and  inefficient  can  cunningly  continue  in  their 
idleness,  knowing  that  the  active  and  enterprising  will 
work  rather  than  starve,  and  that  they — the  indolent 
and  inefficient — can  therefore,  live  upon  the  toil  of  the 
active  and  industrious.  For  every  product  of  the  toil 
of  the  few  must  be  evenly  shared  with  the  idle  and 
shiftless  classes. 

7. 

In  conclusion,  I  would  say  that  Marxianism,  is  de- 
fective in  that  it  fails  to  meet,  and  erroneously  refuses 
to  meet-,  the  crowning  economic  need  of  man.  It  is, 
therefore,  unattractive,  and  cannot  obtain  acceptance 
from  more  than  a  minority  of  the  race. 

The  crowning  economic  need  of  man  is  the  oppor- 
tunity to  acquire  Individual  wealth  and  earn  dividends. 
While  we  may  have  co-operation,  socialization,  in  the 
production  of  wealth,  yet  we  must  have  individualiza- 
tion in  its  distribution. 

Every  economic  system,  therefore,  that  would  meet 
the  economic  needs,  and  observe  the  economic  rights, 
of  man,  must  grant  to  each  not  only  the  right  to  work 
and  earn  just  wages  and  the  power  to  buy   all  needed 


Rev.  Alexander  F.  Irvine. 

Associate  pastor  of  the    Church    of    the    Ascension,    New    York 

(Episcopal).    Eloquent  preacher  and  lecturer.     Active  Socialist. 


Rev.  Edwin  Ellis  Carr. 
One  of  the  founders  and  editors  of  the  Christian  Socialist. 


THE    TRUE    SOCIALISTIC    PROGRAM.  191 

commodities  at  a  fair  price,  but  also  the  right  to  invest 
his  increasing  savings,  earn  dividends,  and  thereby  ac- 
quire an  income  independent  of  present  toil. 

And  men  will  never  suffer  themselves  to  be  deprived 
of  this  right  as  Marxianism  proposes.  Neither  will  they 
suffer  their  dividends  to  be  put  in  a  common  pot  to 
be  shared  in  the  form  of  pensions  with  the  idle  and 
inefficient  as  Marxianism  necessitates.  Just  as  every 
industrious  man  demands  that  a  distinct  account  be 
kept  of  his  work  and  that  he  be  paid  a  just  price  for 
all  that  he  performs,  as  he  demands  that  a  distinct 
account  be  kept  of  what  he  consumes  and  that  he  pay 
a  fair  price  for  only  what  he  buys,  so  he  demands  that 
a  distinct  account  be  kept  of  all  that  he  invests  and  that 
he  be  paid  a  just  dividend  on  all  that  he  has  invested. 
He  demands  in  short  that  wealth  in  its  distribution  be 
individualized,  and  that  whatever  he  owns,  he  shall 
own  distinctly  and  fully,  and  that  it  be  entirely  his. 
But  Marxianism  deprives  men  of  this  right.  It  is 
therefore,  defective  and  unattractive  and  cannot  obtain 
the  acceptance  of  more  than  a  small  part  of  the  race. 

8. 

What,  then,  we  may  ask,  is  the  true  socialistic 
method?  The  true  socialistic  method,  it  seems  to  me 
lies  in  the  scheme  which  I  have  unfolded  in  this  little 
book. 

Industrial  socialism  means,  as  I  have  said,  co-opera- 
tion in  the  production  of  wealth,  but  individualization 
in  its  distribution.  It  must  have  for  its  object  the 
same  end  as  the  present  system,  namely,  the  acquisi- 
tion of  individual  wealth. 


192  EFFECTIVE    INDUSTRIAL    REFORM. 

Now  it  is  a  fact  that  my  scheme,  and  my  scheme 
alone,  will  embody  all  these  principles  and  efficiently 
achieve  all  these  and  other  necessary  ends.  It  there- 
fore embodies  the  true  socialistic  program. 

For  in  the  first  place,  my  plan  will  achieve  the  ful- 
lest and  most  efficient  co-operation  in  the  production 
of  wealth.  For  it  will  organize  the  people  into  one 
business  corporation  for  the  ownership  and  most  effi- 
cient operation  of  every  utility. 

And  yet  secondly,  it  will  secure  the  most  perfect 
individualization  in  the  distribution  of  wealth.  For  it 
will  perform  every  economic  function  and  serve  as  the 
agent  of  the  people  in  the  acquisition  of  individual 
wealth.     It  will  make  every  man  wealthy  at  forty-five. 

And  my  plan  will  secure  justice  in  relation  to  every 
function.  It  will  keep  a  strict  account  of  every  man's 
work  and  pay  him  a  just  wage.  It  will  keep  a  strict 
account  of  all  that  he  consumes  and  charge  him  only  a 
just  price.  And  it  will  keep  a  strict  account  of  all 
that  he  invests,  and  pay  him  a  just  and  equal  dividend 
on  all  his  capital  invested.  And,  finally,  it  will  grant 
to  all  equal  opportunity  to  work,  to  buy,  to  invest  one's 
savings,  earn  dividends  and  accumulate  wealth. 

It  will  achieve  the  highest  efficiency.  For  it  will 
not  weaken  but  intensify  the  sense  of  individual  respon- 
sibility on  the  part  of  all.  It  will  stimulate  labor  to 
do  its  best,  it  will  elect  the  best  management.  It  will 
so  correlate  and  integrate  our  industrial  and  commercial 
activities  that  the  most  efficient  production  must  result. 

Our  plan,  farthermore,  gets  rid  of  all  use  of  the 
humiliating  and  pauperizing  pension  system  as  proposed 


THE    TRUE    SOCIALISTIC    PROGRAM.  193 

by  Marxianism.  Our  plan  establishes  a  true  organic 
connection  between  the  capital  which  each  man  invests 
and  the  income  which  he  shall  receive.  Instead  of 
having  one  method  of  raising  the  capital  and  another 
method  of  caring  for  its  people  in  old  age,  it  establishes 
a  vital  connection  between  the  two,  as  it  should.  It 
says  to  each  man, — You  shall  subscribe  your  quota  of 
the  needed  capital,  and  then  on  this  capital  you  will  be 
paid  your  quota  of  the  dividends  earned  by  the  aggre- 
gate capital  of  the  country.  And  so  you  will  be  able 
not  only  to  pension  yourself  but  to  earn  for  yourself  a 
competence  so  that,  when  middle  life  is  reached,  you 
will  be  independent  of  the  slavery  of  toil. 

And  my  plan  will  make  and  keep  the  people  supreme 
over  their  whole  industrial  and  commercial  life,  so  that 
justice  and  efficiency  shall  always  prevail. 

The  plan  of  industrial  reconstruction  propounded 
in  this  book  embodies,  therefore,  the  true  socialistic 
program. 

In  the  beginning  of  this  Chapter,  I  said,  that  Marx's 
method  was  an  advance  upon  the  older  methods  of 
voluntary  co-operation.  The  plan  advocated  in  this 
book  is,  I  believe,  an  advance  upon  the  Marxian  method 
and  carries  Industrial  socialism  up  to  its  perfect  evolu- 
tion. Marx's  plan  is  a  system  of  communistic  capital- 
ism; and  such  a  system  will  not  work.  My  plan  is  a 
system  of  democratic  capitalism  and  that  will  work, 
and  that  is  true  socialism.  When  our  nation  began  its 
history  its  industries  were  individualistic,  and,  there- 
fore, anarchistic  and  unorganized.  Then  came,  as 
inevitably  must  come,  Industrial  despotism.     The  next 


194  EFFECTIVE    INDUSTRIAL    REFORM. 

step  is  Industrial  democracy;  and  that  is  my  plan. 
And  that  is  true  socialism. 

In  this  place  I  would  say,  that  my  criticism  of 
Marx's  method  springs  from  no  hostility  towards  Marx- 
ianism,  but  from  a  desire  to  aid  true  socialism  in  its 
speedy  introduction  into,  and  control  over,  our  whole 
industrial  and  commercial  life.  All  intelligent  and  fair- 
minded  men — whether  they  know  it  or  not, — are  social- 
ists in  spirit.  One  has  but  to  state  the  fundamental 
aims  and  principles  of  socialism  to  a  fair-minded  man 
to  have  them  at  once  accepted.  What  the  world  is 
waiting  for  is  some  practicable  method  by  which  to 
embody  the  principles  of  a  true  socialism  in  industrial 
action.  This  book  is  a  contribution  to  the  solution  of 
this  problem. 

In  conclusion,  I  would  say  that  I  believe  that  this 
new  scheme  lies  in  the  direction  which  Industrial  re- 
form is  already  unconsciously  taking. 

For  already  the  idea  of  a  universal  business  corpora- 
tion seems  to  be  groping  its  way  into  the  world.  The 
American  Steel  corporation  encourages  all  its  workmen 
to  buy  stock  in  the  corporation  at  a  certain  fair  rate — 
as  it  claims.  And  not  a  few  corporations  seek  to  per- 
suade as  many  people  as  possible  to  invest  in  them, 
for  the  very  purpose  of  making  them  to  some  extent 
a  public,  a  universal,  institution.  I  am  told  that  a 
group  of  Socialists  in  Northern  Italy  have  organized 
themselves  into  a  corporation  and  built  a  railroad, — a 
small  one  indeed, — but  it  is  a  railroad  built  by  socialists. 
Are  they  not,  in  this  very  enterprise,  indicating  the 
direction  which  socialism  must  ultimately  take?     Let 


THE    TRUE    SOCIALISTIC    PROGRAM.  195 

them  advocate  organizing  the  whole  people  by  law  into 
a  business  corporation  for  the  ownership  of  all  indus- 
tries and  they  will  be  advocating  the  plan  unfolded  in 
this  book. 

And  everywhere  the  deep-seated  desire  of  the  people 
is  not  to  annihilate  the  great  corporations,  but  to  con- 
trol them  and  so  control  them  that  they  shall  become 
the  agents  of  wealth  for  all  the  people.  Why  not  then 
meet  this  great  desire  of  humanity,  by  constituting  the 
people  themselves,  the  whole  public,  into  one  universal 
business  corporation  after  our  plan?  We  shall  thus 
bring  every  one  into  the  single  producing  firm  amply 
protected,  and  able  thereby  to  acquire  wealth  equally 
with  every  other  man.  This  will  give  us  organized  co- 
peration,  which  is  true  socialism,  indeed, — a  socialism 
based  upon  individual  responsibility  and  subordinate 
to  the  acquisition  of  individual  wealth.  And  this  plan 
can  be  made  universal  throughout  the  earth.  It  can 
be  introduced  into  France,  Italy,  Germany,  and  every 
other  country  as  well  as  the  United  States.  But  why 
cannot  the  United  States  lead  the  way  by  first  adopt- 
ing it  here? 

"Time  rewards  the  pioneer 
Who  clears  a  higher  path  for  man." 
Why  cannot  the  people  of  the  United  States,  be  that 
pioneer  in  clearing  the  way  for  Effective  Industrial  Re- 
form? 


CHAPTER  XIII. 

THE  LABOR  UNION  AND  INDUSTRIAL  REFORM. 

The  organization  of  working  men  in  Labor  Unions, 
can  scarcely  be  viewed  as  a  reform  movement;  for  it 
was  not  introduced  in  order  to  change  our  present 
system.  Yet  it  was  formed  in  order  to  remedy  the 
wrongs  of  a  certain  class.  And  working  men  certainly 
view  the  labor  union  as  a  means  of  obtaining  higher 
wages  and  shorter  hours, — in  a  word,  as  a  method  of  ob- 
taining justice  for  laboring  men. 

It  is  all-important,  therefore,  to  ask — Will  the  Labor 
Union  bring  justice  even  to  the  working  class? 

The  Labor  Union  has  been  and  still  is  of  great  value 
viewed  as  a  fighting  organization  on  the  side  of  labor; 
and  it  should  never  be  given  up  nor  dissolved  so  long 
as  present  industrial  conditions  prevail. 

For,  in  the  first  place,  the  Labor  Union  has,  in  many 
cases,   elevated  wages  and  stood  as  a  mighty    break- 
water against  the  incoming  tide  of  capitalistic  aggression. 
It  has  shortened  hours  of  labor  and  introduced  bet- 
ter conditions  in  factories. 

It  has  led  to  the  enactment  of  laws  limiting  and 
abolishing  child-labor.  It  has  helped  to  limit  and,  to 
some  extent,  drive  out  the  sweat-shop. 

But  above  all  it  has  kept  before  the  world  the  in- 
sufferable evils  of  our  industrial  system  and  educated  the 
vast  body  of  working  men  into  a  consciousness  of  soli- 
darity that  will  make  reform,  if  not  by  the  labor  union, 
then  by  some  other  method,  possible.  For  not  until 
working  men  have  learned  the  lesson  of  united  action 


Yard  Engine,  Stockbridge,  Mass. 


Hoisting  Engine 
Building  an  elevated  crossing  over  the  New  Haven  railroad. 


THE    LABOR    UNION    AND    INDUSTRIAL    REFORM.     197 

for  the  general  weal  is  reform  of  present  evils  attainable. 
For  reform,  when  it  comes,  will  come  largely  through 
the  support,  if  not  the  leadership,  of  working  men. 

But  while  the  Labor  Union  may  be  good,  viewed  as 
a  fighting  organization  for  the  working  class,  yet  it  will 
achieve  no  ultimate  cure  of  present  wrongs. 

(1).  In  the  first  place,  it  is  a  fact  patent  to  all  who 
know  the  situation,  that  the  Labor  Union  does  not  bring 
just  proportional  wages  even  to  the  different  classes  of  labor. 

It  is  a  notorious  fact  that  certain  close  labor  organiza- 
tions are  able  to  demand  very  high  wages;  but  others 
that  cannot  form  a  strong  organization  obtain  much 
smaller  pay.  Compare  for  example  the  wages  of 
bricklayers  and  plumbers  with  those  of  machinists  and 
other  working  men  whose  skill  is  as  great  as  that  of  the 
bricklayer  and  plumber.  In  Boston  the  wages  of 
bricklayers  in  1907  ran  from  55  to  65  cents  per  hour. 
In  New  York  from  65  to  75  cents  per  hour.  While 
machinists  earned  only  from  25  to  35  cents  per  hour. 

In  short,  the  least  examination  of  the  labor  schedule 
will  verify  the  statement  that  the  different  wages  of 
different  working  men  are  relatively  unjust.  And  this 
is  owing  to  the  fact  that  certain  Unions  have  the  power 
of  forming  a  closer  organization  than  others.  In  other 
words,  in  our  labor  unions,  it  is  still  largely  the  law  that 
might  makes  right;  and  might,  not  justice  is  the  law 
determining  the  relative  wages  received  by  different 
classes  of  men.  And  I  doubt  whether  this  injustice  can 
ever  be  changed  by  the  Labor  Union  alone. 

(2).  But  there  is  another  fact,  scarcely  noted  here- 
tofore, of  great  significance  on  which  all  laboring  men 


198  EFFECTIVE    INDUSTRIAL    REFORM. 

should  ponder.  It  is  this.  In  almost  no  case  does  the 
Labor  Union  obtain  any  advantage  at  the  expense  of 
the  princes  of  finance.  In  almost  every  case  where  an 
apparent  advantage  is  gained, — whether  it  be  in  the 
direction  of  an  increase  of  wages  or  a  shortening  of 
hours, — the  advantage  is  obtained  only  at  the  cost 
of  some  equivalent  loss  in  some  other  direction,  or  by 
increasing  the  burdens  of  some  other  plundered  class. 

For  example  when  the  strike  occurred  for  better 
wages  and  better  hours  on  the  street  Railways  of  Boston 
in  1900,  the  strikers  had  the  sympathy  of  the  public 
and  apparently  won  the  victory.  And  yet  the  writer 
has  been  assured  by  working  men  on  the  road,  by  motor- 
men  and  conductors,  that  the  advantage  was  only  ap- 
parent. For  the  capitalists,  while  seemingly  granting 
an  increase  of  wages,  yet  by  means  of  certain  new  rules 
and  arrangements,  the  rise  in  wages  was  in  reality  nulli- 
fied and  some  men  really  received  less  than  before. 
There  may  have  been  a  small  portion  of  the  strikers 
benefited  by  the  strike,  but,  if  so,  it  was  at  the  expense, 
not  of  the  capitalist,  but  of  other  laboring  men  whose 
wages  were  really  lowered  thereby. 

The  common  way  by  which  the  Capitalist  prevents 
all  increase  in  wages  from  coming  out  of  his  own  pockets 
and  at  the  same  time  punishes  the  public  for  its  sym- 
pathy with  the  strikers  is  by  increasing  the  price  de- 
manded of  the  consumer.  When  the  strike  occurred  in 
the  anthracite  region  of  Pennsylvania  in  1902-3,  the 
strikers  finally  won.  But  later  investigation  showed,  I 
am  told,  that  by  the  increase  of  price  which  the  owners 
of  the  mines  put  upon  Coal,  they  not  only  recouped  their 


THE    LABER    UNION    AND    INDUSTRIAL    REFORM-     199 

losses  and  paid  the  increase  of  wages,  but  realized  a 
handsome  profit  besides.  In  other  words,  the  whole 
advantage  gained  by  the  strikers,  the  cost  of  the  strike, 
and  the  handsome  profits  which  came  to  local  dealers, 
who  charged  $15  a  ton  for  coal  during  the  strike, — all 
came  out  of  the  pockets  of  the  consumer  already  bur- 
dened beyond  endurance. 

Many  a  strike  has  been  followed  by  the  ruin  of  a 
business  and  nearly  the  ruin  of  the  village  in  which  the 
plant  was  placed.  But  while  the  laboring  man  suffers 
and  the  town  suffers  and  smaller  dealers  suffer,  yet  in 
almost  every  case  we  find  the  millionaire  at  the  top 
somehow  coming  out  ahead  and  going  into  business 
somewhere  else  better  off  than  before.  After  the  expo- 
sure of  the  methods  of  the  Beef  Trust,  the  prices  of 
meat  bounded  up  still  higher.  Thus  the  trust  punished 
the  people  for  giving  heed  to  Upton  Sinclair's  revela- 
tions and  recouped  their  own  losses. 

Finally,  we  would  say  that  a  rise  of  wages  for  any 
one  trade  is  nearly  always  secured  at  the  expense  of  a 
loss  of  wages  or  an  increase  of  rents  paid  by  another  class- 
When  the  Bricklayers  and  Stone  Masons  of  Boston 
and  vicinity  made  a  demand  in  May  1906  for  an  increase 
of  wages  on  and  after  June  first  1906,  demanding  that 
the  wages  for  ordinary  work  be  raised  from  55  to  60 
cents  per  hour  and  that  work  on  sewers  be  raised  from 
65  to  70  cents,  the  large  Contractors  sent  out  to  Real 
Estate  Owners  and  Prospective  Builders  a  statement  in 
which  they  said  in  substance  that  while  they  thought 
that  the  demand  made  by  the  Unions  was  excessive,  as 
compared  with  the  wages  received  by  other  working 


200         EFFECTIVE  INDUSTRIAL  REFORM. 

men,  nevertheless  they  were  willing  to  grant  the  in- 
crease, providing  the  Real  estate  Owners  and  Prospec- 
tive Builders  were  willing  to  grant  it.  In  other  words, 
the  Contractors  had  no  objection  to  paying  the  increased 
demand,  providing  it  did  not  come  out  of  their  own 
pockets.  And  what  was  the  reply  of  the  Real  Estate 
Owners  and  Prospective  Builders  ?  It  was  substantially 
the  same  as  that  of  the  Contractors,  namely,  that  they 
did  not  object  to  the  increase,  providing  it  could  be 
gotten  out  of  somebody  besides  themselves, — providing, 
in  short,  that  it  could  be  gotten  out  of  the  tenant, 
who  pay  rents  and  out  of  the  poor  who  are  seeking  homes 
for  themselves.  In  other  words,  the  demand  of  the 
Bricklayers  and  Stone  Masons  was  to  be  granted  on 
condition  that  the  people  who  pay  rents  and  are  bur- 
dened now  beyond  endurance  could  be  forced  to  foot 
the  bill.  And  it  is  a  fact  that  rents  in  the  spring  of 
1907  immediately  advanced  one  and  two  dollars  a 
month  on  each  apartment. 

It  is  a  simple  fact,  that  the  increase  of  wages  which 
Bricklayers  and  Stone  Masons  now  enjoy,  have  been 
obtained,  not  by  lessening  the  plunder  of  plutocracy, 
but  by  causing  plutocracy  to  increase  the  burdens  of 
the  poor.  They  have  unintentionally  helped  to  drive 
out  of  business  the  small  contractor,  they  have  increased 
the  burdens  of  tenants  and  they  have  not  advanced  the 
cause  of  justice  a  single  step.  They  have  increased 
their  own  pay,  indeed,  but  it  is  a  case  of  Peter  robbing 
Paul  and  not  of  any  true  reform.  They  have  uninten- 
tionally become  only  a  new  Trust,  adding  to  the  burdens 
already  borne  by  the  poor  and  helpless. 


THE    LABOR    UNION    AND    INDUSTRIAL    REFORM.     201 

(3).  Finally,  even  though  the  Labor  Union  might 
be  able  to  control  wages  and  so  bring  justice  in  that 
direction  yet  this  we  must  remember  is  only  one  realm 
in  which  a  despotic  Oligarchy  rules  and  despoils  the 
people.  How  about  extortion  in  the  realm  of  prices? 
How  about  the  wrongs  connected  with  Investments  and 
Dividends  ?  Can  the  Labor  Union  bring  justice  in  these 
two  realms?  Has  it  any  power  over  these  two  realms  at 
all?  And  whatever  victories  the  Union  may  win  in  the 
realm  of  wages  and  hours  of  work,  cannot  all  such  ad- 
vantage be  nullified  by  increased  extortion  on  the  part 
of  Capital  in  the  realm  of  Prices  and  Dividends? 

Owing  to  these  and  other  considerations,  I  maintain 
that  the  Labor  Union  can  never  achieve  a  final  cure  for 
present  wrongs,  nor  remedy  the  evils  of  our  present 
industrial  system.  The  Oligarchy  now  in  control  has 
every  advantage.     Labor  has  every  disadvantage. 

The  only  cure  for  present  wrongs  lies  in  the  adoption 
of  a  new  system  that  will  overthrow,  root  and  branch, 
the  power  of  a  despotic  Oligarchy  and  make  the  people 
supreme. 

And  such  a  system  is  that  unfolded  in  this  book. 
We  can  never  remedy  persent  wrongs  by  a  perpetual 
warfare  between  Capital  and  Labor.  We  must  have 
a  new  system  that  will  unite  Capital  and  Labor  in  each 
man  and  so  make  all  battle  between  the  two  unneces- 
sary and  impossible.  And  this  will  be  achieved  by  the 
adoption  of  our  system.  While,  therefore,  I  would  urge 
the  laboring  man  to  maintain  his  union,  yet  I  would 
urge  him  also  to  bend  every  energy  to  introduce  some 
reform  like  that  advocated  in  this  book.     If  all  working 


202  EFFECTIVE    INDUSTRIAL    REFORM. 

men  would  unite  and  put  half  the  energy  which  they 
now  put  into  the  Union,  into  introducing  such  a  reform, 
our  industrial  system  would  be  speedily  so  changed  as 
to  make  the  union  no  longer  needed. 

For  justice  would  then  come  to  all  classes. 


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CHAPTER  XIV. 

THE    AMERICAN    FARMER    AND .  INDUSTRIAL 
REFORM 

A  few  years  ago  the  most  independent  and  on  the 
whole  the  most  prosperous  and  contented  class  in  America 
was  the  American  farmer.  He  was  then  one  of  the  most 
respected  classes,  and  one  of  the  supreme  factors  in 
the  industrial  world.  He  was  sovereign  over  his  own 
business  and  no  one  could  get  a  "  cinch  "  upon  him. 

For,  in  the  first  place,  he  could  secure  plenty  of  labor 
to  assist  him  on  the  farm  at  a  fair  price.  He  could 
command  a  good  price  in  the  market  for  his  produce. 
And  there  was  no  monopoly  on  the  things  he  had  to 
buy.  If  one  merchant  charged  him  too  high  a  price 
he  could  go  to  another.  And  the  farmer  loved  his 
independence;  he  loved  his  business;  he  thought  it  the 
best  on  earth;  and  he  desired  nothing  better  for  his 
son  than  to  marry  some  thrifty  farmer's  daughter  and 
settle  on  a  farm  near  the  old  home. 

The  farmer  was  a  shrewd  business  man  and  an 
intense  individualist.  He  had  great  admiration  and 
reverence  for  men  like  A.  T.  Stewart,  who  accumulated 
a  fortune  of  $70,000,000.  He  believed  that  such  men 
could  do  no  wrong.  Hence,  when  the  warfare  between 
capital  and  labor  began,  the  American  farmer's  sym- 
pathies were  wholly  with  the  capitalist  and  he  looked 
upon  the  labor  union  as  an  attempt  on  the  part  of  the 
shiftless  and  incompetent  to  increase  wages  and  shorten 
hours  for  no  just  cause. 


204  EFFECTIVE    INDUSTRIAL    REFORM. 

Hence,  when  certain  theories  of  public  ownership  were 
first  promulgated,  they  met  with  hostility  from  the 
American  farmer.  The  great  princes  of  finance,  who 
had  already  conceived  the  idea  of  enslaving  the  world, 
shrewdly  counted  upon  the  American  farmer  to  form 
the  great  bulwark  against-  all  those  forces  that  would 
oppose  their  nefarious  schemes.  And  it  is  a  fact,  that 
in  the  past,  the  American  farmer  has  been  the  unyield- 
ing supporter  of  those  plutocratic  forces  that  have  been 
enslaving  us  all. 

But  to-day  the  American  farmer  is  beginning  to  get 
his  eyes  open  and  to  change  his  attitude.  For  he  is 
beginning  to  feel  the  crushing  weight  of  the  shrewd 
business  men  whom  he  so  much  admired  and  so  loyally 
defended.  He  is  beginning  to  see  that  the  multi-milion- 
aire  makes  his  millions  only  by  crushing  all  the 
people, — working  man,  common  business  man,  and  the 
farmer  alike  under  his  iron  heel. 

For  first,  as  a  result  of  the  battle  between  capital 
and  labor,  the  farmer  can  no  longer  pay  the  wages 
demanded  by  labor.  The  laboring  man  disdains 
the  low  pay,  the  long  hours,  and  the  drudgery  of 
the  farm.  And  this  alone  means  the  slow  ruin  of  the 
farmer. 

But  secondly,  the  farmer  can  no  longer  control  the 
market  for  his  produce.  The  shrewd  business  man, 
whom  the  farmer  once  so  greatly  admired,  has  corralled 
the  farmer's  market.  The  farmer  can  no  longer  sell  to 
the  highest  bidder.  He  must  take  that  price  which  the 
Trust  is  pleased  to  offer  or  "leave  it."  And  all  trans- 
portation is  also  in  the  control  of  the  same  irresponsible 


THE   AMERICAN  FARMER  AND  INDUSTRIAL   REFORM.     205 

Power.  The  farmer  is  at  the  mercy  of  these  princes  of 
finance.     And  this  alone  means  also  slow  ruin. 

But  thirdly,  the  farmer  finds  that  these  shrewd 
business  financiers  have  also  corralled  the  manufacture 
and  sale  of  all  the  things  that  the  farmer  must  buy, 
whether  it  be  machinery  for  his  farm  or  furniture  for 
his  household.  And  the  farmer  must  pay  the  price 
which  the  trust  demands  or  "leave  the  goods." 

Thus,  at  every  point,  the  American  farmer  has  lost 
his  independence.  At  every  point  in  the  game,  he  is 
at  the  mercy  of  both  labor  and  capital.  A  new  world 
has  grown  up  around  him  and  he  no  longer  belongs  to 
the  dominant  forces.  On  the  contrary,  the  American 
farmer  is  being  slowly  reduced  to  the  level  of  the  peasant 
class  of  Europe.  The  American  farm,  in  many  places, 
is  being  abandoned, — or  it  is  sold  to  the  foreigner,  who 
by  putting  his  wife  or  daughter  behind  the  hoe  and  the 
plow — making  her  do  the  severe  work  of  a  hired 
man,  is  able  to  make  a  living.  Or  else  the  farm  is 
sold  to  the  millionaire  landlord  and  the  farmer  becomes 
his  dependent,  thus  building  up,  in  America,  a  landed 
aristocracy  on  the  one  hand,  and  a  landed  peasantry  on 
the  other  as  in  Europe.  Many  are  blind  to  the  change, 
but  it  is  slowly  taking  place. 

J.  A.  Everitt,  founder  of  the  American  Society  of 
Equity  says, — "The  census  of  1900  shows  that  taking 
all  the  farmers  together,  the  average  income  per  family 
was  during  the  census  year  only  $643,  a  little  over  $2 
a  day. 

"Two  and  one-third  millions  families  had  a  yearly 
income  of  less  than  $200.     And  four  millions  had  less 


206  EFFECTIVE    INDUSTRIAL    REFORM. 

than  $400."     "Only  one  family  in  eight  had  an  income 
of  more  than  $800." 

"Are  farm  prices  equitable,  when  two-thirds  of  the 
families  on  the  farms  are  limited  to  an  income  of  less 
than  $400  a  year?"  (J.  A.  Everitt.— The  Third 
Power,    p.  112.) 

And  this  injustice  he  attributes  to  the  power  of  or- 
ganized Capital  which  fixes  prices  with  despotic  sway, 
(p.  114.) 

"The  farmer,"  he  says  "does  not  drive  a  nail,  use 
a  pin,  lift  a  hoe  or  spade,  coil  a  rope  or  turn  a  furrow, 
but  he  pays  tribute  to  some  one  of  the  numerous  armies 
arrayed  against  him." 

In  the  dedication  of  his  book  entitled  "  The  Third- 
Power,"  he  calls  the  farmer,  "  The  largest  class,  the  most 
dependent  class,  the  hardest  working  class,  the  poorest 
paid  class  of  people  in  the  world." 

Finally,  J.  P.  Roberts,  for  thirty  years  Dean  of  Ag- 
riculture of  Cornell  University,  writing  in  the  Outlook 
(May  8,  1909)  says  — 

"A  large  number  of  farmers — I  believe  a  majority  of 
them — are  now,  and  for  the  last  twenty-five  years  have 
been  selling  many  staple  crops  at  a  real  loss." 

"By  this  I  mean,  that  if  the  farmer's  time  is  charged 
up,  to  his  wheat  bill  for  instance,  at  the  wages  of  com- 
mon laborers,  ($2.00  to  $2.50  per  day),  and  if  there  be 
.added  the  other  items  in  the  cost  of  production,  as  the 
cost  of  fertilizers  and  so  forth,  the  selling  price  of  the 
crop  will  not  balance  the  account." 

"Astounding  as  the  statement  is,  it  is  a  fact  that  many 
grain  and  hay  farmers  are  working  for  50  cents  or  less  a 
day  and  boarding  themselves." 


THE   AMERICAN   FARMER  AND  INDUSTRIAL   REFORM.     207 

"Had  it  not  been  for  that  vast  expanse  of  virgin  soil 
which  until  now  awaited  the  migrant  cultivator,  the 
American  farmer  would  long  since  have  fallen  to  the 
condition  of  a  peasant." 

Do  we  wonder  in  the  light  of  these  facts  that  young 
men  are  abandoning  the  farms? 

And  yet  while  young  men  are  rushing  from  the  farm 
because  of  these  hopeless  conditions,  some  of  our  parlor 
economists  are  urging  the  "turning  of  a  much  larger 
proportion  of  working  men  to  agricultural  pursuits,"  to 
relieve  the  congestion  and  poverty  of  the  cities! 

What  is  the  remedy  of  this  unjustice? 

Some  say — Introduce  agricultural  instruction  into 
our  schools.  Make  the  farmer  a  more  intelligent  tiller 
of  the  soil  and  thereby  increase  his  profits.  Now  I  am 
in  favor  of  agricultural  instruction  in  the  schools.  But 
so  long  as  our  present  despotic  industrial  system  pre- 
vails, this  will  only  increase  the  plunder  of  the  oligarchy 
at  the  top.  For  the  extent  .to  which  the  farmer  shall 
be  plundered  will  be  limited  only  by  the  amount  that 
he  has  to  be  plundered  of.  The  oligarchy  in  control  has 
the  power  to  take  and  will  take  all. 

But  another  remedy  is  suggested. 

Mr.  J.  A.  Everitt  referred  to  above,  says  that  there 
are  three  factors  in  the  industrial  world — Land,  Labor, 
and  Capital.  Now  says  Mr.  Everitt,  Capital  is  organized, 
Labor  is  organized,  but  Land  "the  Third  Power,"  is 
unorganized.  Hence  the  American  farmer  is  ground 
under  the  feet  of  both  Labor  and  Capital. 

The  remedy,  therefore,  which  Mr.  Everitt  recom- 
mends is  the  organization  of  the  American  farmer  into 


208  EFFECTIVE    INDUSTRIAL    REFORM. 

a  sort  of  Union — a  "  Society  of  Equity  " — and,  by  mutual 
agreement  and  cooperative  action,  put  the  price  on  his 
products  up  to  that  level  which  justice  and  equity 
demand.  It  was  under  the  leadership  of  Mr.  Everitt 
and  his  Society  of  Equity  that  the  Tobacco  and  Cotton 
producers  in  Kentucky,  Tennessee  and  other  southern 
States  were  organized  against  the  Tobacco  Trust  and  the 
Cotton  Trust.  And  it  was  from  the  attempt  to  carry 
out  his  methods  that  night-riding  sprang. 

Now  the  question  arises, — Will  this  remedy, — the 
Organization  of  the  farming  population  into  a  single 
body, — A  Third  Power — advance  the  prices  on  farm 
products  and  bring  justice  to  the  American  farmer? 

Our  answer  to  this  inquiry  is  an  unqualified,  No. 

For,  First,  the  farmer  isolated  and  tied  to  the  duties 
of  his  farm  simply  cannot  form  a  strong  enough  organiza- 
tion, to  control  the  prices  of  the  products  even  of  the 
farm.  Every  attempt  of  this  kind  has  in  the  end  met 
with  signal  failure.  What  have  the  farmers  in  Ken- 
tucky, Tennessee  and  other  states  been  able  to  effect 
against  the  tobacco  trust  and  the  cotton  trust?  Noth- 
ing permanent.  And  yet  in  their  determination  to 
effect  something,  they  brought  on  a  condition  of  in- 
cipient social  war. 

Second.  Even  if  the  farmer  could  combine  so  as 
to  control  the  price  of  his  own  products — this  would  not 
bring  justice.  For  there  are  several  other  avenues  through 
any  one  of  which  this  advantage  could  and  would  be 
completely  nullified.  For  first,  Labor  could  imme- 
diately increase  its  price,  so  that  the  farmer  would 
have  to  pay  in  increased  wages  all   that  was   gained  by 


Chicago  Stock  Yards. 
When  the  people  own  the  Beef  Plants,  the  farmer  will  not  only 
share  in  the  profits  of  the  plants,  but  receive  a  higher  return  for 
his  cattle  on  the  hoof. 


When  the  people  own  the  Railroads,  the  farmer  will  not  only 
share,  as  a  stockholder,  in  the  dividends,  but  the  profits  on  his  pro- 
duce will  not  be  swallowed  up  by  excessive  freight  charges. 

When  Edward  H.  Harriman,  the  railroad  magnate,  died  (1909), 
he  left  $150,000,000  to  his  wife, — a  fortune  gouged  out  of  the  earn- 
ings of  the  people,  and  no  small  part  came  from  the  farmer. 


THE   AMERICAN  FARMER  AND  INDUSTRIAL  REFORM.     209 

putting  up  the  price  on  his  own  products.  Or  second 
the  owners  of  the  Railroads  could  increase  freight 
charges  and  so  nullify  all  the  advantage  gained;  or, 
lastly,  the  manufacturer  of  Farm  Machinery  could 
increase  his  prices,  and  so  eat  up  all  that  the  farmer 
had  made.  Thus  the  farmer  would  still  be  at  the 
mercy  of  both  labor  and  capital  and  would  fight  a 
losing  battle. 

Besides,  I  add,  how  can  any  group  of  sensible  men 
expect  that  justice  can  ever  come,  when  human  society 
is  divided  into  three  antagonistic  classes,  as  Land, 
Labor  and  Capital,  and  all  engaged  like  three  angry  bull- 
dogs in  perpetual  battle  with  each  other? 

What  then  is  the  remedy  of  the  wrongs  of  the  Amer- 
ican farmer? 

First,  the  American  farmer  must  come  to  realize 
that  human  society  forms  one  great  industrial  and 
commercial  whole.  Second,  that  we  are  all  being  ground 
under  the  heel  of  the  same  atrocious  despotic  power. 
Then,  third,  he  must  join  with  the  rest  of  society 
in  organizing  the  people  into  a  single  Business  Corpora- 
tion to  overthrow  this  despotic  power,  root  and  branch, 
and  so  make  the  people  supreme.  There  is  no  other 
way  by  which  to  bring  justice  to  every  class. 

By  adopting  this  method  justice  is  certain. 

For  let  us  suppose  that  the  community  should 
adopt  the  plan  proposed  in  this  book  and  suppose  that 
the  farmer  would  join  with  the  rest  of  the  people  in 
acquiring  possession  of  the  railroads  after  our  plan,  what 
would  be  the  effect  on  the  farmer?  The  effect  would 
be  not  only  that  the  farmer  would  become  a  capitalist 


210  EFFECTIVE    INDUSTRIAL    REFORM. 

in  the  Railroad  and  reap  his  share  of  the  profits  but  he 
would  become  one  of  the  sovereign  capitalist  factors  in 
their  control  and  could  demand  that  his  produce  be 
carried  to  the  market  at  a.  just  price.  Suppose  again 
that  with  the  rest  of  the  people  he  should  acquire 
ownership  and  control  over  the  great  emporium  or 
markets,  for  his  and  all  other  products  of  the  land,  what 
effect  would  that  have  upon  him?  The  effect  would 
be  that  he  would  not  only  reap  his  share  of  the  dividends 
earned  in  the  business  of  the  country,  but  he  would 
become  one  of  the  sovereign  capitalist  factors  fixing 
prices  and  he  could  demand  that  a  just  price  be  paid  to 
him  for  his  produce  and  so  justice  would  inevitably  be 
done.  Suppose  that,  in  the  same  way,  he  should  join 
with  the  rest  of  the  people  in  owning  and  running  the 
great  monopolistic  manufactures  of  farm  machinery, 
household  furniture,  pianos,  paper  and  so  forth.  Here 
too  he  would  not  only  reap  a  handsome  profit,  but  he 
would  become  a  sovereign  capitalist  factor  in  determin- 
ing prices  which  he  and  others  would  have  to  pay  for 
these  utilities  and  so  justice  would  be  done  even  in  the 
things  which  he  had  to  buy. 

Thus  under  the  operation  of  our  plan  the  farmer  will 
regain  at  every  point  that  independence  and  power 
which  he  has  lost.  And  he  will  again  become  a  sovereign 
capitalistic  factor  in  the  industrial  and  commercial 
world.  And  the  industry  of  farming  will  be  lifted  to  its 
true  place  and  become  attractive  to  the  young  as  one 
of  the  means  of  making  a  success  in  life. 

But  some  one  asks, — "  But  does  not  your  plan  con- 
template acquiring  possession  of  the  land — by  public 


THE   AMERICAN   FARMER  AND  INDUSTRIAL   REFORM.     211 

ownership  and  so  will  you  not  ultimately  drive  the 
farmer  from  his  farm?  In  reply  to  this  question,  we 
would  say,  that  no  doubt  that  ultimately,  the  people 
will  acquire  possession  of  the  land  and  so  make  farming 
or  agriculture,  one  of  the  public  Industrial  functions. 
But  in  doing  this,  we  will  not  drive  the  farmer  off  of  the 
farm  nor  lessen  his  income.  On  the  contrary,  we  shall 
elevate  farming  into  a  still  larger  and  freer  calling.  We 
shall  join  many  small  farms  into  one.  And  on  the  large 
farm  thus  created  we  shall  place  the  skilled  farmer  to 
take  control  like  the  president  of  the  railroad,  and  we 
shall  pay  him  a  far  larger  income  than  he  now  receives, 
and  he  will  have  less  hardship,  more  help,  and  a  freer 
life.  He  will  still  be  one  of  the  sovereign  capitalistic 
factors  in  the  world.  He  will  still  own  the  farm,  but  in 
co-partnership  with  the  rest  of  the  people  whom  he 
shall  serve,  even  as  they  shall  be  in-co-partnership  with 
him  and  serve  him.  Thus  whatever  changes  may  occur 
under  the  gradual  evolution  of  our  scheme  of  reform, 
every  one's  rights  shall  be  strictly  guarded  and  justice 
shall  be  done.  And  we  are  sure  that  the  farmer,  under 
our  plan,  will  not  lose  in  position  and  independence. 
For  now  he  is  master  only  of  his  little  farm.  But  under 
the  new  scheme,  he  will  be  master,  with  others,  of  the 
whole  Plant  called  Civilization,  and  he  will  be  equal  in 
wealth  and  power  with  every  one  else. 

We  appeal,  therefore,  to  the  American  farmer  to 
join  with  us  in  introducing  this  great  reform,  through 
which  alone  justice  can  come. 

The  farmer  too  often  feels  hostility  toward  American 
Labor,  as  if  the  working  man  was  the  cause  of  all  his 


212  EFFECTIVE    INDUSTRIAL    REFORM. 

trouble.  But  the  farmer  must  throw  away  this  hostility ; 
and,  joining  with  working  men  and  other  classes,  must 
overthrow  that  greedy  despotic  power  which  is  crushing 
both  farmer  and  working  man  and  smaller  capitalist 
under  its  feet. 


Tennis  Court  and  Club  House  in  the  Berkshires. 


Golf  Tournament — Watching  a  Drive. 


* r  * tfiWfie**   "*" 


Going  to  the  Next  Hole. 


Note. 
When  we  have  the  reform  advocated  in  this  book,  the  farmer 
will  be  able  to  spend  a  month  with  his  family  playing  golf  in  the 
Berkshires,  if  he  so  desires. 


CHAPTER  XV. 

QUESTIONS  AND  ANSWERS— METHOD  OF  PRO- 
MOTING THE  REFORM. 

To  those  who  for  the  first  time  contemplate  the 
scheme  of  reform  advocated  in  this  book,  certain  ques- 
tions and  objections  naturally  arise.  Let  us  consider 
some  of  these. 

1. 

"Are  the  people  competent  to  own  and  direct  their 
own  industrial  and  commercial  activities  as  this  scheme 
contemplates?  "Are  they  financially  and,  especially, 
intellectually  capable  of  doing  this?" 

They  are  certainly  financially  capable,  as  I  have 
already  shown.  For,  as  we  have  seen,  although  it 
would  require  at  least  $30,000,000  to  capitalize  the 
Chicago  street  railways,  yet  the  citizens  are  easily 
capable  of  raising  the  capital  by  the  method  which  I 
illustrated.  But  if  the  citizens  of  Chicago  can  capitalize 
their  street  Railways,  they  can  by  the  same  method 
capitalize  any  other  industry  which  our  scheme  may 
demand.  And  the  same  affirmation  can  be  said  of  all 
the  citizens  in  the  United  States.  For  we  do  not  con- 
template acquiring  possession  of  every  industry  all  at 
once.     We  shall  take  them  up  one  by  one  as  we  are  able. 

But  are  the  people  competent  intellectually  to  own  and 
control  their  own  industries  as  this  scheme  contemplates  ? 

I  am  firmly  convinced  that  they  are. 

The  one  fallacious  plea  of  despotic  power  in  all  ages 
has  been  the  alleged  incapacity  of  the  people  to  take 
care  of  themselves. 


214  EFFECTIVE    INDUSTRIAL    REFORM. 

Partly  from  honest  conviction,  but  chiefly  from  love 
of  plunder,  the  self-appointed  teachers  and  leaders  of 
the  people,  instead  of  instructing  the  people  and  fitting 
them  to  be  self-reliant,  have  systematically  taught  the 
people  from  infancy  that  they  are  utterly  incompetent 
to  take  care  of  themselves. 

"It  is  not  safe," — they  said — "for  you  to  do  your 
own  thinking.  You  are  free  from  danger  only  when 
you  permit  us  to  do  your  thinking  for  you." 

"You  are  incompetent  for  self-government.  Sub- 
mit yourselves  to  us,  your  heavenly  ordained  rulers, 
and  all  will  be  well." 

And  now  the  last  plea  in  justification  of  desoptic 
power  is  that  of  the  incompetence  of  the  people  in  the 
industrial  world. 

"A  few  men," — it  is  affirmed, — "now  own  all  the 
wealth  of  the  world.  It  always  has  been  so;  it  always 
will  be  so.  For  you,  the  people,  are  utterly  incom- 
petent to  capitalize  and  manage  your  own  industrial 
activities.  Submit  yourselves  wholly  to  our  paternal 
care.  And  if  we,  the  heaven-born,  industrial  magnates, 
systematically  grind  you  to  the  earth,  pray  God  to 
convert  us  to  a  more  sacred  conception  of  Christian 
stewardship.  But  do  you  never  call  us  to  account,  nor 
question  our  divine  right  to  absolute  power  and  to  own 
all.  Above  all  never  harbor  the  thought  that  you 
yourselves  might  better  own  and  direct  your  own  in- 
dustrial affairs;   for  that  would  mean  ruin." 

Now  the  time  has  come  for  the  people  to  repudiate 
with  scorn  this  whole  imputation  of  incompetence  in 
the    industrial   world.     The   men  who   to-day  run   our 


Building  an  Elevated  Crossing — All  Italians. 
The  son  of  foreman  (man  with  hand  on  stone)  is  a  graduate  of  Har- 
vard and  is  now  a  student  member  of  the  U.  S.  Ambassadorial  Staff  in 
Constantinople. 


This  Man  Works  the  Crane  in  Picture  Above. 
He  works  three  engines  at  once.     Immigrants  like  these  supply  the 
very  best  material  out  of  which  to  construct  Industrial  Democracy. 


QUESTIONS    AND    ANSWERS.  215 

industrial  affairs  are  not  one  whit  more  competent  or 
more  brainy  as  a  class  than  the  rest  of  the  people. 
There  are  men  in  every  calling  some  of  them  earning 
not  more  than  a  thousand  a  year,  who  are  just  as  brainy 
as  the  men  in  the  corporations.  The  greater  wealth 
of  these  men  is  due  not  to  their  superior  brain,  but  to 
the  tremendous  advantage  which  their  position  creates. 
Give  the  men  in  any  vocation  the  superior  external  ad- 
vantage, which  is  given  to  the  men  in  the  corporations, 
and,  with  no  addition  to  their  brain  power,  they  would 
accumulate  wealth  like  the  industrial  magnates  to-day. 
This  may  seem  like  a  strong  statement  to  those  who 
cravenly  bow  before  the  God  of  mammon.  But  it  is 
strictly  true. 

To-day  the  people  of  America  resent  the  idea  that 
they  cannot  govern  themselves,  or  take  care  of  them- 
selves in  the  political  world,  or  that  they  need  the 
services  of  some  irresponsible  despot  to  rule  over  them. 
They  proudly  affirm  not  only  that  they  can  rule  them- 
selves, but  that  they  can  maintain  a  better  government, 
and  a  better  condition  of  society  than  any  irresponsible 
despot  or  oligarchy  ever  maintained.  And  all  history 
makes  good  this  affirmation.  Indeed,  just  in  propor- 
tion as  despotic  power  obtains  in  any  country,  in  that 
proportion  does  injustice,  inefficiency,  poverty  and 
failure  enter  in.  But  just  in  proportion  as  the  people 
become  supreme,  justice,  efficiency,  liberty,  and  pros- 
perity have  been  enthroned  and  permanently  enthroned. 

I  confidently  maintain,  therefore,  that  the  people  of 
the  United  States  are  more  capable  of  owning,  wisely 
controlling  and   fully   capitalizing,   every   industry  ac- 


216  EFFECTIVE    INDUSTRIAL    REFORM. 

cording  to  our  plan,  than  any  industrial  baron  or  group 
of  commercial  magnates  that  ever  lived.  And  if  the 
people  will  but  organize  themselves  into  a  single  pro- 
ducing firm  as  I  have  outlined,  they  will  make  their 
industries  more  productive,  and  they  will  achieve 
greater  justice,  than  has  ever  been  realized  by  any 
private  corporation  under  the  sun. 

All  that  the  people  need  is  a  little  encouragement 
from  those  teachers  and  leaders  that  are  really  friendly 
to  them.  We  must  appeal  not  to  the  people's  weak- 
ness, but  to  the  people's  strength.  We  must  evoke  the 
spirit,  not  of  dependence  and  fear,  but  of  self-reliance 
and  courage.  And  the  vast  majority  of  the  people 
will  nobly  respond  and  make  of  the  new  scheme  a  grand 
success.  Of  course,  the  people  will  not  be  able  to  sub- 
scribe as  much  capital  at  first,  as  others,  and  they  will 
need  leadership.  But  with  each  new  industry  socialized, 
there  will  come  increased  financial  power,  and  with 
experience,  will  come  wisdom,  until  the  people  shall 
attain  to  perfect  competence  in  owning  and  directing 
their  whole  industrial  and  commercial  activities. 

2. 

Why  do  you  make  the  subscription  of  the  capital 
compulsory, — why  not  allow  it  to  be  voluntary? 

We  make  the  subscription  of  the  capital  compul- 
sory— and  make  this,  indeed,  fundamental  in  our 
scheme, — because,  first,  Industrial  reform,  in  order  to 
be  effective,  must  embrace  the  whole  people, — all  must 
be  in  it  and  stand  or  fall  together.  Second.  Because 
in  no  other  way  can  we  have  the  capital  when  needed- 
For  suppose  for  a  moment  that  the  subscription  of  the 


QUESTIONS    AND    ANSWERS.  217 

capital  was  voluntary.  What  would  be  the  inevitable 
result  ?  The  result  would  be  that  even  persons  in  favor 
of  the  reform  would  forget  to  have  the  money  at  hand 
when  it  was  required;  and  others  would  fail  all  together. 
And  some  would  refuse  to  subscribe  at  all.  If  the  people 
are  going  into  business  together,  the  capital  must  be 
on  hand  when  needed.  But  to  cause  it  to  be  on  hand 
when  needed,  it  must  be  required  by  law.  Third.  We 
require  each  citizen  to  subscribe  his  quota,  in  order  to 
prevent  persons  of  an  antogonistic  spirit  from  working 
up  a  faction  to  draw  off  when  some  enterprise  is  pro- 
posed, and  so  defeating  the  enterprise  and  even  destroy- 
ing the  new  plan. 

To  prevent  these  evils  we  shall  call  upon,  and,  if 
need  be,  require  each  mai*  to  subscribe  his  quota  of 
the  capital.  We  shall  thus  consolidate  the  people  into 
one  organized  whole.  And  so  make  all  to  stand  or  fall 
together.     And  so  justice  shall  be  done. 

3. 

But  another  question  is  asked, — Will  men  be  wil- 
ling to  adopt  this  scheme?  Will  they  be  willing  to 
vote  for  the  public  ownership  of  an  industry  when  to 
do  so  will  require  them  to  subscribe  the  needed  capital? 

I  have  no  fears  but  that  they  will  be  willing  to  do 
this  when  once  the  proposition  is  fairly  presented  to 
them.  For  suppose  once  that  the  municipality  of 
Chicago,  should  guarantee  to  the  people  a  5%  dividend 
and  as  much  more  as  they  can,  by  their  combined 
effort,  make  the  Street  railways  pay, — suppose  that  it 
should  offer  them  the  option  of  investing  their  capital 
in  an  annuity,  or  of  receiving  it  back  at  death  in  a  cash 


218  EFFECTIVE    INDUSTRIAL    REFORM. 

payment  to  their  heirs, — can  we  believe  that  the  people 
would  be  unwilling  to  adopt  our  scheme?  And  espe- 
cially, when  they  once  grasp  the  evils  of  the  present 
system  on  the  one  hand  and  all  the  benefits  flowing 
from  the  adoption  of  our  scheme, — on  the  other — the 
making  of  every  man  a  capitalist  in  his  country's  in- 
dustries and  every  man  well-to-do  by  the  time  that 
he  is  forty-five  years  of  age, — we  have  no  fears  but 
that  they  will  be  overwhelmingly  willing  to  adopt  our 
plan  of  reform.  Indeed,  it  is  not  the  people  who  to-day 
oppose  public  ownership,  but  the  princes  in  high  finance, 
who  are  determined  not  to  surrender  their  present  power 
to  plunder. 

4. 

But  another  question  is  asked, — Will  it  be  right  to 
require  the  people  to  subscribe,  each  his  quota,  towards 
the  capitalization  of  these  public  utilities?"  Will  it 
be  right  to  require  the  minority  to  yield  to  the  will  of 
the  majority  and  stand  or  fall  with  them? 

In  view  of  each  man's  relation  to  each  industry 
and  in  view  of  the  present  situation,  it  certainly  will 
be  right  to  do  this,  as  I  have  already  indicated. 

For  in  the  first  place,  each  man  is  as  vitally  depend- 
ent upon  the  existence  of  each  industry  as  any  other 
man;  it  is  as  much  his  duty  therefore  to  see  to  its 
proper  capitalization  as  any  other  man.  Take  the 
industry  of  farming.  Is  not  Mr.  Smith  as  fully  depen- 
dent upon  the  products  of  the  farm  for  life  and  happi- 
ness as  any  other  man?  What  right  then,  has  he  to 
say, — "Let  Mr.  Brown  go  into  farming  if  he  will;  I 
will  having  nothing  to  do  with  it.     There  is  not  profit 


QUESTIONS    AND    ANSWERS.  219 

enough  in  it  for  me."  "Not  profit  enough  in  it  for 
him!"  What  right  has  any  man  to  say — "Let  my 
neighbor  run  the  business  that  has  little  profit  in  it, 
while  I  run  the  business  that  yields  fabulous  profits," 
— if  both  industries  are  equally  necessary  to  the  life 
and  happiness  of  both  men,  as  they  certainly  are? 

But  this  is  not  all.  In  the  evolution  of  human  so- 
ciety, certain  forces  or  conditions  of  evil  may  arise 
which  inflict  unspeakable  wrong  upon  certain  classes, 
and  those  classes  may  be  utterly  unable  of  themselves 
to  right  those  wrongs.  It  may  be  possible  to  right 
those  wrongs  only  by  the  united  effort  of  the  whole 
people. 

Now,  when  such  evil  forces  or  conditions  arise,  it  is 
the  duty  of  everybody  to  join  in  one  collective  organiza- 
tion of  the  people  for  the  utter  overthrow  of  those 
wrongs.  And  no  person  can  refuse  to  join  in  the  work 
on  the  ground  that  his  own  rights  have  not  been  in- 
vaded and  that  the  affair  does  not  concern  him.  The 
affair  does  concern  him.  He  is  responsible  for  the  cure 
of  every  organized  wrong  in  the  society  of  which  he  is 
a  member  and  he  can  be  compelled  to  do  his  part  in 
the  great  whole  for  the  righting  of  these  particular 
wrongs. 

Now  we  have  seen  in  the  preceding  pages  that  great 
wrongs  have  arisen  in  connection  with  our  whole  indus- 
trial system, — wrongs  in  relation  to  wages,  prices  and 
investments, — that  are  simply  insufferable. 

And  we  have  seen  that  these  wrongs  can  be  cured 
only  by  organizing  the  people  into  a  single  business 
corporation,    with    every   man    as    a    shareholder    and 


220  EFFECTIVE    INDUSTRIAL    REFORM. 

responsible  agent  in  it.  But  this  means  that  each 
man  shall  subscribe  his  quota  of  the  needed  capital. 

I  hold,  therefore,  that  it  is  not  only  right,  but  it  is 
the  duty  of  the  people  to  organize  themselves  into  a 
great  stock-corporation  according  to  some  such  a  scheme 
as  we  have  outlined  in  this  book,  and  to  require  each 
citizen  to  subscribe  his  proper  quota  of  the  needed 
capital  and  become  a  responsible  agent  in  this  general 
corporation. 

The  truth  is  that  the  present  industrial  situation 
with  its  perils,  resulting  from  the  evolution  of  the 
stock-corporation,  on  the  one  hand,  and  the  rise  of  a 
merciless  industrial  despotism,  on  the  other,  has  caused 
a  new  order  of  moral  and  social  obligations  to  emerge, 
— obligations  of  the  most  imperative  character.  The 
first  is  the  obligation  resting  upon  the  whole  people 
collectively,  to  create  or  take  possession  of,  and  capital- 
ize and  administer  all  their  monopolistic  and  quasi  pub- 
lic activities.  To  suffer  any  man  or  any  group  of  men  to 
own  and  control  our  industrial  life,  in  its  present  in- 
tegrated form  is  to  commit  a  crime  like  that  of  allow- 
ing our  country  to  fall  under  the  absolute,  despotic 
power  of  the  Tzar  of  Russia.  The  second  imperative  ob- 
ligation is  the  duty  resting  upon  each  man  individually 
to  subscribe  and  own  his  share  of  the  capital  needed 
to  establish  each  plant,  the  duty  to  bear  his  share  of 
sovereign  responsibility  in  its  management,  and  to  reap 
his  share  of  the  reward.  In  short,  it  is  the  imperative 
duty  of  each  man  to  become  a  sovereign,  capitalistic, 
factor  in  our  whole  industrial  life,  to  bear  his  share 
of    the    burden    and    stand    or    fall    with    the    rest. 


METHOD    OF    PROMOTING    THE    REFORM.  221 

And  the  performance  of  this  duty  can  be,  and  ought  to 
be,  enforced  by  law.  The  right  to  require  each  man  to 
subscribe  his  quota  of  the  capital  in  the  single  produc- 
ing firm,  the  people's  corporation,  which  we  contem- 
plate, rests  upon  the  same  moral  grounds,  and  is  as 
imperative,  as  the  right  to  tax  each  man  to  support 
the  government  or  the  public  school. 

5. 

But  is  your  plan  within  the  limits  of  constitutional 
law? 

If  it  is  not,  of  course  we  shall  be  compelled  to  secure 
an  amendment  of  the  State  constitution  in  order  to 
introduce  our  scheme.  And  this  can  be  done.  But  I 
am  convinced  that  there  is  no  feature  of  this  new  plan 
that  is  not  clearly  within  the  limits  of  state  and  national 
constitutional  law. 

It  has  already  been  decided  by  supreme  authority 
that  the  public  ownership  of  public  utilities  is  clearly 
within  the  limits  of  the  constitutions  of  the  several 
states  and  of  the  United  States.  Our  plan,  therefore, 
viewed  as  a  form  of  public  ownership  is  clearly  consti- 
tutional. 

But  how  about  your  peculiar  method  of  raising  the 
capital,  paying  dividends  and  guaranteeing  a  5%  divi- 
dend? 

In  regard  to  these  things,  it  can  be  said  that  the 
capital,  which  each  man  pays  in,  may  be  viewed  in  some 
three  ways,  each  of  which  is  clearly  constitutional. 

First,  it  may  be  viewed  as  a  tax  assessed  upon  each 
citizen  to   capitalize   a  needed   public   utility.     Hence, 


222  EFFECTIVE    INDUSTRIAL    REFORM. 

it  is  perfectly  within  the  limits  of  constitutional  law  to 
require  each  to  subscribe  and  pay  in  his  quota. 

Second,  the  capital  paid  in,  by  each,  may  be  viewed 
as  a  loan  made  by  the  citizen  to  the  government  to 
capitalize  a  public  industry.  Hence,  it  is  perfectly 
within  the  limits  of  constitutional  law  for  the  govern- 
ment to  guarantee  a  minimum  dividend  of  5%, — more 
or  less.  It  is  a  fact  that  the  government  of  Massachu- 
setts has  put  its  credit  behind  the  Metropolitan  district 
around  Boston  to  the  extent  of  about  $62,000,000 
(1908).  It  has,  in  short,  borrowed  and  turned  over 
to  the  use  of  the  Metropolitan  district  this  vast  sum, 
trusting  in  the  district  to  pay  up  the  several  bonds  of 
the  issue  as  they  become  due.  Now,  if  it  is  within  the 
limits  of  constitutional  law  to  guarantee  the  payment 
of  bonds  to  the  extent  of  $62,000,000  for  the  Metro- 
politan district,  it  surely  is  within  the  limits  of  consti- 
tutional law  for  the  government  of  any  county,  city,  of 
state,  or  the  nation,  to  guarantee  a  5%  dividend  to  the 
investors  in  a  public  utility  which  such  county,  city, 
state,  or  the  nation  may  acquire. 

Third,  the  capital  may  be  viewed  as  a  private  in- 
vestment in  a  business  corporation  for  the  earning  of 
dividends.  Hence,  it  is  perfectly  within  the  limits  of 
constitutional  law  to  allow  each  citizen  to  earn  as  large 
a  dividend — above  5%, — as  he  with  his  fellow  citizens 
may  enable  the  plant  to  pay. 

Of  course,  it  is  to  be  admitted  that  our  scheme  of 
public  ownership  is  different  from  any  other  plan  of 
public  ownership  yet  proposed.  Nevertheless,  I  am 
firmly  convinced  that  all  its  features  are  clearly  within 


QUESTIONS    AND    ANSWERS.  223 

the  restrictions  of  constitutional  law  both  of  state  and 
nation.  And  to  secure  its  adoption  would  require  only 
the  enactment  of  such  laws  as  are  demanded  for  the 
adoption  of  any  other  form  of  public  ownership,  already 
introduced  in  many  cities  and  states  and  even  in  the 
United  States.  What  is  the  Panama  canal  but  a  form 
of  public  ownership  of  a  quasi  public  utility?  If  such 
an  undertaking  is  constitutional,  certainly  the  plan  un- 
folded in  this  book  is  constitutional. 

6. 

But  some  one  asks, — Is  not  your  system  based  upon 
compulsory  co-operation,  and  is  not  compulsory  co- 
operation always  wrong?     Is  it  not  un-American? 

It  must  be  admitted  in  reply,  that  the  new  system 
does,  indeed,  involve  compulsory  co-operation  so  far  as 
the  minority  are  concerned.  For  we  contemplate  or- 
ganizing the  whole  people  into  one  single  producing 
firm  or  corporation,  by  law,  with  every  citizen  in  it 
as  a  share-holder  and  responsible  agent.  And  this  im- 
plies that  the  minority  will  have  to  fall  into  line  with 
the  majority,  in  the  assumption  of  ownership  of  each 
plant,  and  stand  or  fall  with  the  rest. 

But  I  deny  that  such  compulsory  co-operation  is 
wrong.  On  the  contrary,  when  such  compulsory  co- 
operation is  necessary  for  the  common  welfare  and 
safety  it  is  right.  For  example  suppose  that  a  storm 
should  arise  at  sea,  and  the  efforts  of  all  the  male  pas- 
sengers, as  well  as  the  sailors,  were  required  to  save 
the  ship.  But  suppose  that  some  of  the  passengers 
should  refuse  to  co-operate  with  the  rest.  Suppose 
that  they  should  even  purpose  to  take  possession  of  the 


224  EFFECTIVE    INDUSTRIAL    REFORM. 

boats  and  escape, — leaving  the  rest  with  the  women 
and  children  to  perish.  Would  it  not  be  perfectly  right 
in  that  case  to  compel  these  passengers  to  remain  in  the 
ship  and  co-operate  with  the  rest  for  the  common  safety  ? 
Would  it  not  be  right  to  say  to  these  men, — "The  safety 
of  all,  especially  of  the  women  and  children,  demands 
that  all  co-operate  and  remain  with  the  ship.  You  shall 
not  therefore,  at  your  pleasure,  abandon  the  others  in 
this  extremity.  You  must  remain  with  the  ship,  and 
survive  or  perish  with  the  rest." 

Certainly  in  this  and  in  all  other  cases  where  the 
common  weal  demands  co-operation  and  union,  co-oper- 
ation and  union  can  and  must  be  preserved,  if  need  be, 
by  compulsion. 

And  when,  in  human  society,  such  co-operation  and 
union  are  necessary  to  defend  human  rights  and  pro- 
mote the  general  welfare,  such  co-operation  and  union 
directed  by  the  sovereign  will  of  the  people,  are  not  only, 
not  wrong,  but  they  are  gloriously  right  and  justifiable. 

And  this  compulsory  co-operation  is  no  new  thing 
in  America,  neither  is  it  un-American,  nor  contrary  to 
the  American  spirit.  On  the  contrary,  all  that  is  best 
in  our  American  institutions  and  civilization,  is  based 
upon  the  exercise  of  this  principle.  Our  civil  govern- 
ment, which  is  the  freest  and  best  on  earth,  is  based 
upon  this  principle  of  compulsory  co-operation  directed 
by  the  sovereign  will  of  the  people.  For  every  person 
born  within  the  United  States,  is  born,  without  his 
consent,  a  citizen  of  this  Republic.  And  he  is  born 
not  only  under  its  privileges  but  also  under  its  responsi- 
bilities.    And  he  is  compelled  to  pay  taxes,  and  even 


QUESTIONS    AND    ANSWERS.  225 

to  enlist  and  fight  in  its  defense  in  case  of  need.  And 
no  State  can  go  out  of  the  Union  except  with  the  con- 
sent of  the  rest  and  that  consent  will  never  be  given. 
When  the  South  attempted  to  secede  from  the  Union, 
the  people  rushed  to  war  to  compel  them  to  stay  in. 
What  is  this  but  compulsory  union  and  co-operation 
of  the  strongest  kind.  And  yet  our  government  is,  as 
we  have  just  said,  the  best  and  the  freest  on  earth. 

And  our  public  school  system  is  based  upon  the 
principle  of  compulsory  co-operation.  The  majority  in 
these  United  States  says  to  the  minority, — "We  can- 
not individually  give  to  our  children,  that  education 
which  it  is  their  right  to  receive  and  which  the  safety 
of  the  state  demands.  We  must,  therefore,  all  join 
together,  and  you  must  join  with  us,  in  maintaining  a 
public  school  adequate  to  meet  the  needs  of  the  chil- 
dren and  the  state." 

The  United  States  mail,  is  a  material  Industry  as 
truly  as  the  carrying  of  express  or  freight.  And  yet 
it  is  based  upon  compulsory  co-operation.  The  same 
thing  can  be  said  of  our  system  of  Sanitation,  and, 
indeed,  of  every  form  of  Public  ownership  that  has 
been  proposed.  Public  ownership  of  every  form  is 
compulsory  co-operation.  Hence,  whatever  objection 
can  be  brought  against  our  scheme,  on  this  ground,  can 
be  brought  with  equal  and  even  greater  force  against 
every  other  scheme  of  public  ownership  that  has  been 
or  ever  can  be  proposed.  If  compulsory  co-operation 
as  a  principle  is  in  itself  wrong,  if  the  minority  is  never 
to  be  constrained  by  the  majority  to  secure  co-operative 
action,  then  our  system  of  government  is  wrong  and 


226  EFFECTIVE    INDUSTRIAL  .  REFORM. 

all  government  is  wrong, — our  public  school .  system  is 
wrong,  and  no  public  school  system  can  be  devised 
that  is  not  wrong.  Our  Mailing  system  is  wrong. 
And  we  had  no  right  to  undertake  the  digging  of  the 
Panama  canal.  In  short,  if  all  compulsory  co-operation 
is,  in  itself,  wrong,  then  all  government,  all  law  and  order, 
all  general  co-operative  effort,  all  public  education  are 
simply  impossible,  and  anarchy  must  rule  the  world. 

The  mere  fact,  therefore,  that  the  system  proposed 
in  this  book  is  based  upon,  or  necessitates,  compulsory 
co-operation,  does  not  condemn  it  of  itself.  Neither, we 
may  add,  does  this  fact  make  it  un-American.  On  the 
contrary  the  fact  that  this  scheme  involves  compulsory 
co-operation,  directed  by  the  sovereign  will  of  the 
people,  in  the  interest  of  justice,  is  not  only  greatly  in 
its  favor,  but  gives  it  complete  justification.  It  is  this 
feature  that  places  it  in  direct  line  with  our  civil  govern- 
ment, our  system  of  education,  and  all  that  is  best  and 
most  valuable  in  our  American  institutions. 

Whether,  therefore,  the  system  proposed  in  this 
book,  with  its  fundamental  principle  of  compulsory  co- 
operation, enforced  by  the  sovereign  will  of  the  whole 
people  is  justifiable  or  not,  is  to  be  determined  wholly 
by  the  question  as  to  whether  that  system  is  needed  or 
not,  and  whether  its  fruits  will  be  good  or  bad. 

But  this  question  has  already  been  answered  in  the 
preceding  pages  in  the  most  emphatic  and  decisive 
way.  The  adoption  of  this  scheme  is  not  only  neces- 
sary to  overthrow  the  terrible  despotism  that  reigns  at 
present,  but  it  will  bring  in  a  new  heavens  and  a  new 
earth  wherein  shall  dwell  righteousness.     It  will  give 


QUESTIONS    AND    ANSWERS.  227 

us  a  society  founded  in  Justice.  The  scheme  proposed 
in  this  book,  therefore,  is  necessary  and  justifiable. 
And  it  is  in  perfect  accord  with  the  very  spirit  and 
genius  of  American  Institutions  and  civilization. 

7. 

But  someone  asks, — How  about  the  worthless  and 
drunken  classes  in  your  system, — will  the  active  and 
industrious  be  willing  to  enter  into  forcible  partnership 
with  the  shiftless  and  incompetent? 

In  answer  to  this  question,  it  can  be  said,  first,  that 
society  always  is,  and  always  must  be,  in  fact,  in  a 
sort  of  industrial  partnership  with  the  shiftless  and 
worthless  classes.  We  are  in  partnership  with  them 
to-day,  and  we  are  just  as  much  in  partnership  with 
them  now  as  we  shall  be  when  our  new  plan  is  adopted. 
For  these  shiftless  classes  are  here  on  this  earth  and  we 
are  obliged  in  some  measure  to  care  for  them,  and 
often  to  provide  them  with  work  when  their  work  is 
scarcely  needed.  The  problem  of  the  worthless  and 
drunken  classes  always  has  been,  and  always  shall  be 
a  problem,  hard  to  solve.  But  it  will  be  no  more  of  a 
problem  under  our  plan  than  it  is  under  the  present 
system. 

But  some  one  asks, — "Will  not  the  shiftless  and 
worthless  be  able  under  your  plan  to  forcibly  load  them- 
selves onto  the  active  and  industrious?"  To  this  ques- 
tion must  be  given  for  answer  an  unqualified — No.  For 
how  can  they  under  the  new  plan  load  themselves  onto 
the  active  and  industrious  any  more  than  to-day?  Will 
it  be  by  receiving  dividends  which  they  do  not  earn? 
Certainly  not.     For  in  the  new  order  no  man  will  re- 


228  EFFECTIVE    INDUSTRIAL    REFORM. 

ceive  dividends  except  on  the  actual  capital  which  he 
himself  invests.  Will  they  be  able  to  buy  food  and 
clothing  without  paying  for  them?  No.  For  every 
man  will  be  called  upon  to  rigidly  pay  for  all  that  he 
consumes.  Will  the  shiftless  and  worthless  be  able  to 
hold  jobs  and  receive  wages  for  work  which  they  never 
perform?  No.  For  it  will  be  a  rigid  law  that  the  best 
jobs  and  best  places  will  be  given  to  the  best  men; 
these  will  also  receive  the  best  pay.  The  worst  men 
will  be  given  the  worst  jobs  and  the  poorest  pay.  And 
the  worthless  men  will  be  given  no  work  at  all  and  no 
pay.  And  this  will  hold  true,  whether  each  man  has 
any  money  invested  in  our  country's  industries  or  not. 
The  truth  is  that  in  the  new  order  the  whole  country 
will  demand  most  imperatively  of  every  superintendent 
that  he  make  his  plant  the  most  productive  possible 
and  that  no  shirk  nor  dead-beat  be  favored  in  any  way. 
The  result  will  be  that  every  shirk  and  dead-beat  will 
be  compelled  either  to  work  or  get  out. 

But  some  one  asks, — Suppose  that  these  shiftless 
and  worthless  classes  refuse  to  invest  in  our  country's 
industries,  what  then?  What  then?  Why,  we  will  just 
go  ahead  with  our  new  plan  and  leave  them  out.  Is 
the  car  of  progress  to  be  stopped  and  the  prosperity 
of  the  whole  country  to  be  arrested  because  a  few 
shirks  refuse  to  step  with  the  rest  of  us  within  the  traces 
and  help  pull  the  car  along? 

In  conclusion  of  this  subject  it  should  be  said  that 
I  believe  that  under  my  plan  the  number  of  the  shiftless 
and  worthless  will  be  far  less  than  to-day.  For  the 
existence  of  these  classes  is  due  in  large  measure,  indi- 


QUESTIONS    AND    ANSWERS.  229 

rectly,  to  present  evil  industrial  conditions.  But  with 
the  introduction  of  our  plan  these  evil  conditions  would 
largely  disappear  and  hence,  these  shiftless  and  worth- 
less classes  would  gradually  pass  away. 

I  maintain,  therefore,  that  the  existence  of  a  shiftless 
and  worthless  class  affords  no  objection  to  the  adop- 
tion of  this  scheme  of  reform,  and  it  affords  no  obstacle 
to  the  highest  operation  of  it.  The  new  scheme  will 
tend  to  lift  up  everybody.  It  will  place  an  open  door 
before  every  soul  and  make  justice  possible  for  all. 
But  if  some  men  and  women  refuse  to  be  helped,  or 
refuse  to  use  the  opportunities  opened  up  to  them, — 
if  a  few  shiftless  people  refuse  to  enter  into  the  new 
scheme, — the  scheme  will  not  thereby  be  made  a  failure. 
For  under  the  operation  of  the  new  plan,  the  shiftless 
and  worthless  classes  can  injure  only  themselves.  The 
active  and  industrious  can  still  press  on  and  reap  the 
advantages  flowing  from  the  adoption  of  the  new  order. 

8. 

But  will  not  your  scheme  destroy  that  valuable 
factor  of  individual  initiative, — the  individual  initiative 
of  great  minds, — which  is  so  important  an  element  in 
human  progress? 

"There  are  in  every  country," — it  is  justly  said — 
"a  few  great  minds  which  step  outside  the  beaten  track 
and  initiate  new  and  great  enterprises.  It  is  these 
men  who  make  our  country  great.  Now  these  men 
must  be  given  liberty  to  act.  They  cannot  and  must 
not  be  held  down  by  rules  of  co-operation  or  anything 
else."  It  is,  therefore,  important  to  inquire  whether 
our  system,  which  we  propose  in  this  book,  will  dis- 


230         EFFECTIVE  INDUSTRIAL  REFORM. 

courage  the  spirit  of  individual,  initiative,  especially, 
on  the  part  of  great  men?  Or,  to  put  the  question  dif- 
ferently,— Which,  we  may  ask,  will  most  encourage  the 
spirit  of  individual  initiative, — the  present  system  or 
the  one  which  we  propose? 

It  cannot  be  denied  that  the  present  system  does 
encourage  individual  initiative  of  a  certain  kind.  It 
encourages  individual  initiative  in  the  organization  of 
vast  schemes  of  public  robbery.  It  raises  up  every 
year  a  vast  crop  of  conscienceless  schemers  and  plunder- 
ers in  politics  and  in  business.  It  is  giving  birth  to 
great  men, — in  spirit  like  Alexander  the  Great,  or  Julius 
Caesar,  or  Peter  the  great, — who,  indeed,  form  new, 
vast  industrial  combinations;  but  they  are  combina- 
tions which  give  to  their  authors  absolute  despotic 
power  and  crush  the  people  into  the  dust.  But  is  this 
the  sort  of  individual  initiative  which  we  desire  to  en- 
courage? Of  what  value  is  it  to  the  people  that  new 
and  vast  organizations  are  formed  for  the  exploitation 
of  their  timber  lands,  their  coal  mines,  their  beef  in- 
dustry, if  those  new  organizations  only  raise  prices 
higher  and  higher,  thrust  the  people  out  of  every  prom- 
ising vocation,  and  reduce  them  to  dependency? 

But  this  is  not  all.  When  the  present  despotic 
movement  has  finished  its  course,  and  all  things  have 
been  brought  under  the  control  of  a  few  men,  what  will 
become  of  individual  initiative  then?  Is  it  not  a  fact 
that  despotic  power  always  crushes  out  all  individual 
initiative  and  ends  by  placing  mediocrity  and  incom- 
petency on  the  throne  ?  And  then  does  not  ruin  come  ? 
Is  not  this  the  history  of  Russia?     Was  it  not  the  his- 


QUESTIONS    AND    ANSWERS.  231 

tory  of  France  before  the  Revolution?  Is  not  this  the 
history  of  not  a  few  vast  industrial  organizations  to-day 
in  our  own  land?  •  First,  there  was  the  strong  men  who 
built  up  the  business,  but  they  built  it  up  in  the  form 
of  a  vast  despotism;  then  individual  initiative  was 
shut  out,  then  mediocrity  took  the  reins,  and 
then  came  the  financial  crash.  And  when  all  our  in- 
dustrial activities  are  organized  under  the  despotic 
authority  of  a  few  men,  will  not  all  individual  initiative 
be  destroyed?  Will  not  all  aspiring  young  men  be 
discouraged  and  will  not  mediocrity  mount  the  throne; 
and,  then,  later  will  not  the  universal  crash  come? 

But  when  the  system  proposed  in  this  book  is  intro- 
duced, and  the  people  are  sovereign  in  the  whole  indus- 
trial world,  will  not  every  strong  man  be  placed  before 
an  open  door,  will  not  individual  initiative  be  given  the 
freest  play,  and  will  it  not  always  work  for  the  public 
good?  For  when,  under  our  new  system,  all  the  people 
are  hungering  for  good  wages,  fair  prices,  and  good 
dividends,  must  it  not  inevitably  follow  that  the  best 
men  will  be  placed  at  the  heads  of  departments?  And 
will  not  the  people  inevitably  give  them  a  free  hand  to 
work  out  new  and  better  methods  of  organization  and 
production?  Will  not  the  directors  be  selected  from 
among  the  most  enterprizing  men,  from  among  those 
men  who  by  new  methods  and  larger  organization  can 
make  the  business  more  productive  ?  And  will  not  these 
be  the  ones  who  shall  be  retained  in  control? 

Farthermore,  the  new  plan  can  encourage  and  pro- 
tect inventors  and  so  stimulate  inventive  genius  in  a 
way  that  is  impossible  under  the  present  system. 


232  EFFECTIVE    INDUSTRIAL    REFORM. 

And  the  way  can  be  and  shall  be  left  open  for  any 
man  or  any  group  of  men  to  launch  out  into  new  and 
untried  enterprises  in  which  the  whole  people  might 
be  unwilling  at  first  to  engage ;  and  when  these  pioneers 
of  the  new  enterprise  have  made  and  proved  it  to  be 
successful,  the  people  can  then  take  it  up  and  reward 
the  original  promoters.  Our  plan  does  not  at  all  con- 
template preventing  or  even  discouraging  private  in- 
dustrial enterprise  in  blazing  out  the  way  of  new 
methods  and  new  undertakings. 

Thus  under  our  plan,  all  the  most  enterprising 
young  men  will  be  inevitably  encouraged.  Individual 
initiative  on  the  part  of  the  most  capable  will  be  evoked. 
And  under  no  system  will  strong  men  be  given  a  freer 
hand  than  under  the  one  advocated  in  this  book.  One 
reason  why  we  ought  to  adopt  this  plan,  is  because  it 
will  place  the  best  men  in  control,  evoke  all  their  high- 
est powers,  and  enlist  them  always  in  favor  of  the 
public  good  and  the  welfare  of  all.  I  have  not  space 
fully  to  discuss  this  point  here,  but  I  am  certain  that 
a  little  consideration  of  the  facts  in  the  case,  will  verify 
the  foregoing  conclusion. 

9. 

Will  not  the  adoption  of  your  plan  destroy  the  spirit 
of  daring  enterprise  in  great  men,  and  bring  in  a  con- 
dition of  mediocrity  and  inaction? 

This  is  the  objection  which  W.  H.  Mallock  brings 
against  socialism.  He  says,  in  effect,  that  vast  enter- 
prises, like  the  building  of  railroads,  factories,  and  min- 
ing enterprises,  must  be  undertaken  by  great  minds. 
But  that  great  minds  will  not  incur  the  risk  involved 


QUESTIONS    AND    ANSWERS.  233 

in  such  enterprises  unless  they  are  encouraged  by  the 
hope  of  great  rewards,  that  is,  the  hope  of  becoming 
millionaires.  But  socialism  will  destroy  all  possibility 
of  reaping  such  rewards  on  the  part  of  a  few  men. 
Hence,  with  the  coming  in  of  socialism,  all  enterprise 
will  cease. 

Is  this  objection  valid?  It  is  certainly  not  valid 
when  applied  to  my  plan.  On  the  contrary,  the  adop- 
tion of  my  plan  will  awaken  the  spirit  of  enterprise  in 
far  vaster  force  than  has  ever  been  experienced  in  human 
history  before.  ... 

For,  first,  all  history  shows  that  there  is  no  condition 
of  society  so  stimulative  of  true  enterprise  as  demo- 
cracy. And  there  is  no  body  of  men  so  enterprising  and 
capable  as  the  whole  people  when  organized  into  one 
sovereign  power.  The  days  of  the  greatest  enterprise  in 
ancient  Greece  and  Rome  were  days  of  the  most  pro- 
nounced democracy.  In  modern  times,  the  birth  of 
democracy  and  modern  enterprise  are  synchronous. 
No  sooner  did  Japan  throw  off  despotic  power  than  the 
nation  leaped  forward  in  the  race  of  progress  and  the 
highest  achievement.  When  the  corporations  failed  to 
dig  the  Panama  canal,  it  was  the  people  of  the  United 
States  that  took  it  up  with  vigor  and  will  easily  press  it 
to  a  successful  conclusion.  It  is  the  United  States 
which  introduced  one  of  the  most  effective  mailing 
systems  in  the  world.  And  it  is  the  people  of  the 
United  States  who  have  created  the  best  system  of 
education  ever  seen  and  the  best  government  on  earth. 
And  I  am  confident  that  if  we  should  adopt  the  plan  of 
industrial   reform   unfolded   in   this   book,    enterprises 


234  EFFECTIVE    INDUSTRIAL    REFORM. 

now  waiting  for  support  would  be  quickly  undertaken 
and  successfully  completed. 

Take  Wireless  Telegraphy  in  1908.  The  establish- 
ment of  that  enterprise  was  hindered  by  difficulties  in 
raising  the  required  capital,  by  the  rivalry  of  competing 
powers,  and  by  the  opposition  of  corporations  owning 
electric  lines  and  cables.  But  suppose  that  our  plan  had 
been  established,  and  suppose  that  the  promoters  of 
Wireless  telegraphy  had  come  to  the  people  and  said — 
"Here  is  a  new  method  of  national  and  international 
communication  for  you  to  adopt.  It  will,  when  estab- 
lished, bring  you  easily  10%  on  your  capital  besides 
greatly  increasing  .the  value  of  other  enterprises  and 
making  travel  safer  by  sea."  How  quickly  the  people 
would  have  adopted  it.  And  how  easy  for  the  people  to 
have  raised  the  money.  If  each  voter  had  been  requir- 
ed to  subscribe  only  one  dollar,  that  would  have  given 
$15,000,000  to  begin  with.  And  then  unhampered  by 
rival  corporations,  the  best  men  could  have  been  placed 
in  control  of  the  new  enterprise,  and  it  would  soon 
have  been  thoroughly  established  and  tested. 

So  would  it  be  with  every  other  good  enterprise. 
Take  an  enterprise  like  the  building  of  the  McAdoo 
tunnels.  The  chief  obstacle  in  the  way  of  that  under- 
taking was  not  in  the  rock  underneath  the  feet  of  the 
workers  and  the  mud  and  river  overhead,  but  in  the 
determination  of  the  street  car  lines  in  New  York  to 
prevent  the  promoters  of  the  tunnels  from  obtaining 
proper  terminals  and  extensions  in  that  city.  Now 
suppose  that  all  our  industries  had  been  owned  by  the 
people  after  our  plan,  and  suppose  that  Mr.  McAdoo 


QUESTIONS    AND    ANSWERS.  235 

had  appealed  to  the  people  and  said, — "  Here  is  another 
enterprise  which  has  a  fair  promise  of  success.  When 
complete  it  will  earn  you  a  dividend  of  at  least  10% 
besides  greatly  aiding  other  industries," — what  would 
the  people  have  done?  They  would  have  taken  up  the 
enterprise  with  vigor  and  with  none  of  the  vexatious 
opposition  from  New  York  Street-car  lines  or  any  other 
source,  they  would  have  quickly  put  the  enterprise 
through. 

Mallock's  criticism  of  Socialism  assumes  several 
errors.  First,  that  only  a  few  men  are  enterprising; 
when,  as  a  matter  of  fact,  no  body  of  men  are  so  enter- 
prising as  the  whole  people  when  once  they  are  made 
supreme  over  their  own  affairs.  Second,  it  assumes 
that  when  the  people  become  sovereign,  all  great  men 
will  be  thrown  out  of  commission.  But,  as  a  matter 
of  fact,  great  men  will  be  more  in  commission  then  than 
now.  But  they  will  then  be  the  leaders,  and  not,  as 
now,  the  oppressors  of  the  people.  And  the  people, 
led  by  these  men,  and  these  men,  sustained  by  the 
people,  will  engage  in  enterprises  far  vaster  than  today. 
Third,  Mallock  assumes  that  with  the  coming  of  social- 
ism the  financial  motive  will  be  destroyed.  This  would 
no  doubt  be  to  a  large  extent  the  case,  if  Marxian  social- 
ism were  adopted.  But  it  will  not  be  the  case  with 
my  plan.  For  my  plan  is  a  money  making  scheme  just 
as  truly  as  the  private  corporation.  Only  my  plan 
appeals  to  everybody.  Hence,  the  whole  people 
will  be  aroused  by  every  new  scheme  that  offers  a  real 
substantial  promise  of  increasing  the  wealth  of  the 
people.     And  everybody  will  be  enthusiastic  for  it. 


236         EFFECTIVE  INDUSTRIAL  REFORM. 

But  some  one  asks, — Will  not  graft  and  incompetency 
nourish  under  your  plan?  No.  The  cause  of  graft  and 
incompetency,  in  public  enterprises  to-day,  has  been 
startingly  shown  to  lie  chiefly  in  the  existence  of  private 
corporations,  on  the  one  hand,  and  in  the  communistic 
character  of  our  present  public  methods,  on  the  other. 
In  all  public  works  to-day  the  method  of  procedure  is 
communistic,  in  that  the  capital  is  raised  indirectly 
and  there  is  no  individual  subscription  of  the  capital 
and  no  earning  of  dividends.  Such  is  the  character  of 
the  United  States  Mail  and  the  digging  of  the  Panama 
canal.  But  under  my  plan,  no  private  corporations 
will  exist  to  corrupt  legislatures  and,  secondly,  since 
every  man  will  have  his  own  capital  invested  and  his 
dividends  at  stake,  every  man  will  be  on  the  alert  and 
no  such  thing  as  graft,  will  be  possible.  Suppose,  for 
example,  that  the  digging  of  the  Panama  canal  was 
undertaken  after  my  plan,  and  suppose  that  every 
citizen  had  been  called  upon  to  invest  his  quota  of  the 
needed  capital,  and  had  before  him  the  hope  of  earn- 
ing, when  the  canal  is  complete,  at  least  a  10%  divi- 
dend on  his  money,  what  would  occur  in  such  a  case? 
In  such  a  case,  every  man  would  be  alert  against  graft 
and  would  demand  that  the  canal  be  dug  as  economic- 
ally as  possible,  that  the  dividends  ultimately  accruing 
might  be  the  greater. 

Finally,  it  should  be  observed  that  the  element  of 
risk  to  which  Mr.  Mallock  refers  and  makes  so  great, 
will  under  my  plan  be  wholly  or  largely  eliminated,  or 
it  will  be  spread  over  the  whole  people  so  as  to  be  scarcely 
felt  by  each  one  individually. 


QUESTIONS    AND    ANSWERS.  237 

Take  the  case  of  wireless  telegraphy.  The  sole 
risk  we  may  say  in  the  way  of  any  private  corporation's 
undertaking  and  introducing  that  enterprise  was 
the  opposition  of  other  private  corporations.  So  it  is 
with  every  new  enterprise.  Suppose  that  some  skillful 
man  should  find  an  improved  method  of  pumping  and 
refining  kerosene  oil,  where  would  the  risk  lie  in  estab- 
lishing the  new  method  ?  It  would  lie  in  the  opposition 
of  the  great  Standard  oil  monopoly.  And  it  would  lie 
there  alone.  And  it  would  be  so  great  as  to  make  the 
enterprise  impracticable,  unless  he  could  persuade  Stan- 
dard oil  to  adopt  his  method  at  its  own  price. 

But  if  my  plan  was  adopted  in  relation  to  all  indus- 
tries, all  risk  from  this  source  would  be  eliminated  and 
the  whole  people  could  engage  in  any  enterprise  that 
they  desired  undeterred  by  fear  from  this  source.  And 
the  risk  arising  from  uncertainty  in  the  enterprise  itself 
would  be  so  widely  distributed  as  to  make  it  negligible. 
Take  again  the  case  of  wireless  telegraphy.  A  required 
subscription  of  $1  per  voter  would  give  a  capital  of 
$15,000,000.  And  yet  if  from  some  unforeseen  cause, 
the  enterprise  should  prove  a  complete  failure,  the  loss 
would  be,  therefore,  only  one  dollar  per  man, — a  loss 
entirely  negligible. 

I  am  confident,  therefore,  that  if  any  thinking  per- 
son will  once  bring  before  his  mind  what  the  adoption 
of  my  plan  means, — how  it  will  consolidate  the  whole 
people  into  one  vast  business  corporation, — into  a  vast 
wealth-producing  and  money-making  organization,  in 
which  the  interests  of  all  the  people  will  be  equally 
protected  and  promoted, — he  will  be  convinced  that  no 


238         EFFECTIVE  INDUSTRIAL  REFORM. 

scheme  can  be  devised  that  will  so  arouse  the  spirit 
of  universal  enterprise  as  the  one  unfolded  in  this 
book.  And  there  will  be  no  limit  to  the  ability  of  the 
people,  to  achieve  great  things  when  thus  consolidated 
into  one  grand  industrial  and  commercial  whole.  They 
will  be  able  to  achieve  everything  that  they  shall  under- 
take. For  the  capital  of  the  whole  country  will  be 
behind  each  enterprise  and  all  the  energies  of  the  people 
will  be  engaged  in  its  accomplishment. 

With,  the  activities  and  energies  of  the  people  thus 
consolidated  and  stimulated,  I  believe  that  the  wealth 
of  the  people  will  increase,  as  I  have  said  in  a  previous 
Chapter,'  in  leaps  and  bounds.  And  the  time  will 
speedily  come  when  each  industrious  man  will  be  able 
to  acquire  a  small  fortune  of  from  $20,000  to  $40,000 
by  the  time  that  he  shall  reach  45  years  of  age,  and  on 
this  he  can  receive  a  dividend  of,  at  least,  10%,  giving 
him  an  income,  over  and  above  his  earnings  by  labor, 
from  $2000  to  $4000  a  year. 

10. 

"But," — some  zealous  Christian  asks, — "must  we 
not  rely  on  the  Gospel  to  save  the  world?" 

We  must  rely  on  the  Gospel  to  save  the  individual 
soul,  but  we  need  a  just  industrial  organization — an 
organization  in  harmony  with  the  Gospel,  to  save  so- 
ciety. And  if,  while  we  preach  the  Gospel  to  individual 
souls,  we  permit  our  industrial  system  to  be  founded 
in  iniquity  and  to  serve  as  the  agent  of  a  merciless  des- 
potism, we  need  not  be  surprised  if  the  influence  of  the 
Gospel  is  largely  nullified,  and  it  ceases  to  be  the  power 
of  God  unto  salvation  to  this  nation.     To  preach  the 


QUESTIONS    AND    ANSWERS.  239 

Gospel  of  justice  and  mercy  and  then  resolutely  main- 
tain an  industrial  system  of  injustice  and  cruelty  is  to 
mock  God.     Unless  we  carry  the  Gospel  resolutely  into 
our  institutions  and  laws,  the  Gospel  will  cease  to  pene- 
trate individual  life  and  God  will  utterly  reject  us  from 
being  his  people.     And  this    is  what  is    taking  place 
to-day.    We  have  rejected  God's  law  of  justice,  co-oper- 
ation and  mercy  from  our  industrial  system    and    God 
is  rejecting  us.     And  unless  we  repent  and  reform,  this 
nation  will  sink  into  a  condition  of  irreligion,  anarchy 
and   slavery.     We  talk  about  a  revival  of  religion, — 
But,    we    say   to   ministers    and   evangelists, — "do    not 
touch  upon  the  industrial  question."     We  might  as  well 
talk  about   a  revival  of    religion   and    yet  forbid  our 
preachers  to  touch  upon  the  subject  of   sin.      For   the 
chief  seat  of  sin  in  America  and  in  all  Christiandom 
to-day  is  in  our  industrial  system  and  the  chief  root  of 
sin  is  our  greed  for  gold.     We  have  sold  ourselves  body 
and  soul  to  the  god  of  Mammon,  and  we  forbid  our 
ministers  to  point  out  where  our  sin  lies  or  call  the  na- 
tion  to   repentance   or   point   out   the   way   of  reform. 
And  yet  we  talk  about  a  revival  of  religion.     Now,  one 
object  of  this  book  is  to  point  out  to  the  lovers  of  true 
religion  where  our  sin  lies ;  its  object  is  to  call  the  people 
to   repent;     and    point   out    the   way   of   reform.     We 
believe  that  the  next  revival  of  religion  must  be  mark- 
ed   by  a  fearless  assault  upon  our    industrial    system, 
that  great  citadel  of  iniquity,  that  modern  instrument 
of  oppression  and  spoliation.     And  we  must  call  upon 
the  people  of  God  to  come  out  from  the  midst  of  her. 
We  must  assault  her  again  and  again  until  the  present 


240         EFFECTIVE  INDUSTRIAL  REFORM. 

evil  system  is  overthrown,  all  her  iniquities  are  destroyed 
as  by  fire,  and  a  new  system  founded  in  righteousness 
shall  rise  above  her  ruins.  When  the  people  of  America 
do  this,  then  we  shall  have  a  revival  of  true  religion  and 
God  will  pour  out  upon  us  a  blessing  such  that  there 
shall  not  be  room  to  receive  it.  This  language  is  not 
too  strong.  It  is  not  strong  enough  to  depict  the  true 
situation  everywhere  in  the  industrial  world,  and  the 
imperative  demand  for  reform. 

11. 

"But  after  all  is  said,  even  though  your  plan  is 
gradually  introduced,  is  it  not  a  radical  and  daring 
undertaking?" 

Yes,  I  admit  that  it  is.  Although  I  can  see  no  great 
risk  in  it.  But  I  admit  that  the  change,  which  it  con- 
templates of  overthrowing  the  power  of  industrial  des- 
potism and  placing  the  ownership  and  control  of  our 
whole  industrial  life  into  the  hands  of  the  people,  is 
a  radical  and,  in  a  way  a  daring  thing  to  do.  But  are 
not  daring  and  radical  remedies  sometimes  needed  for 
daring  and  radical  evils?  Has  not  society  again  and 
again,  in  the  past,  done  most  radical  and  daring  things 
in  uprooting  deeply  intrenched  wrongs?  Did  not  the 
English  people  do  a  radical  and  daring  thing  when,  in 
1649,  they  overthrew  the  Monarchy  and  established 
the  sovereign  rule  of  the  people?  Did  not  our  fathers 
attempt  a  radical  and  daring  thing,  when  they  repudiated 
the  tyranny  of  the  English  king  and  established  their 
independence?  Are  not  the  people  of  Russia  attempt- 
ing a  radical  and  daring  thing  to-day  in  demanding 
the  overthrow  of  absolutism  and  setting  up  the  sovereign 


METHOD    OF    PROMOTING    THE     REFORM.  241 

rule  of  the  people?  Radical  and  daring  things  must 
often  be  done  in  order  to  uproot  daring  and  deeply 
seated  wrongs. 

And  when  have  there  been  greater  and  more  radical 
wrongs  in  society  than  those  that  afflict  us  to-day? 
And  must  we  not  expect  to  do  great  and  daring  things 
to  overcome  them? 

12. 

What  method  would  you  advise  for  introducing  the 
reform  ? 

I  would  urge  the  Socialist  party  to  advocate  this  re- 
form as  the  true  socialist  methods,  and  let  it  take  the 
lead  in  securing  its  adoption  by  each  community,  be- 
ginning with  some  one  industry  as  the  street  car  lines. 

It  may  be  wise  also  to  form  a  non-partizan  Indus- 
trial Reform  League  or  Committee  to  promote  the 
reform  and  secure  the  enactment  of  such  laws  as  are 
necessary  to  make  it  effective. 

If  we  can  succeed  in  persuading  a  single  city  to 
adopt  this  reform  and  make  it  a  success,  its  adoption 
by  other  cities  and  ultimately  by  the  several  States 
and  the  nation  will  be  very  rapid. 

13. 

How  long  will  it  take  for  the  people  to  introduce 
this  reform? 

The  people  of  America  can  have  the  reform  advo- 
cated in  this  book,  or  any  other  reform,  as  soon  as  they 
awake  and  come  to  know  their  power.  Our  govern- 
ment today  is  in  structure  pure  democracy.  It  is  pure 
political  socialism.  In  America,  the  one  sole  political 
authority  which  we  recognize  is  the  sovereign  will  of 


242  EFFECTIVE    INDUSTRIAL    REFORM. 

the  people.  And  if  the  people  are  not  sovereign  and 
supreme,  it  is  because,  they  are  asleep,  or  they  allow 
themselves  to  be  outwitted  by  the  cunning  plunderers 
at  the  top,  and  so  the  scepter  of  sovereignty  falls  from 
their  nerveless  grasp. 

Democracy, — Socialism, — does  not  have  to  reform 
the  government  in  America,  in  order  to  achieve  its  will. 
The  people  here  are  already  surpeme.  All  that  the 
people  need  to  do  is  to  devise  some  definite,  concrete 
plan  of  reform, — some  plan  that  offers  a  fair  prospect  of 
curing  present  evils, — and  then  by  united  action,  and 
the  resolute  exercise  of  that  sovereign  authority  and 
power  which  they  already  possess,  through  the  ballot, 
put  that  definite  concrete  plan  into  action  and  the  work 
of  reform  is  done.  If  the  plan  is  not  perfect,  it  can  be 
modified  later  as  experience  may  demand.  But  the 
people  will  never  accomplish  anything  by  mere  inac- 
tion,— by  lying  down  and  suffering  industrial  despotism 
to  put  its  iron  heel  on  all  our  necks.  Now,  the  scheme 
unfolded  in  this  book,  offers  the  people  a  definite,  con- 
crete plan  of  action  and  it  offers  a  fair  prospect  of 
curing  present  industrial  wrongs.  Furthermore,  it  is 
capable,  after  adoption,  of  modification,  if  modification 
is  needed.  Why  not,  then,  settle  upon  this  plan  as  our 
present  tentative  program,  and  unitedly  go  forward, 
resolutely  put  it  into  action,  and  so  press  on  to  the 
desired  goal. 

And  does  not  wisdom  dictate  that  we  should  under- 
take this  reform  NOW!  Is  there  not  a  tide  in  human 
affairs  in  favor  of  reform,  which  when  taken  at  the  flood 
leads  on  to  victory?     And  is  not  that  time  the  present? 


METHOD    OF     PROMOTING    THE    REFORM.  243 

Besides,  why  should  we  doom  humanity  to  suffer 
longer?  From  the  beginning  of  the  world  down  to 
the  present  time,  humanity  has  been  divided  into  two 
great  classes, — oppressor  and  oppressed.  The  cry  of 
the  poor  and  the  oppressed  has  gone  up  to  God.  The 
people  can  reform  these  evils  at  any  time  when  they 
awake  and  come  to  know  their  power.  The  supreme" 
power  is  in  their  hands.  Why,  then,  should  we  not  adopt 
the  plan  unfolded  in  this  book?  And  why  not  adopt 
it  now  and  press  resolutely  forward,  trusting  that  the 
same  courage  that  animated  our  fathers  in  their  hour 
of  struggle  will  animate  us,  and  that  the  same  God  who 
sustained  them  and  gave  them  the  victory  will  go 
with  us  and  give  us  like  results. 

And  will  not  some  man  of  wealth,  rich  also  in  busi- 
ness experience,  give  himself  in  leadership  of  the  people 
for  the  successful  introduction  of  this  great  reform? 
He  who  to-day  seeks  to  relieve  distress  and  discontent 
by  giving  millions  in  charity,  is  not  the  man  of  vision, 
neither  does  he  understand  the  cause  of  present  wrongs, 
nor  will  he  be  gratefully  remembered  by  coming  gene- 
rations. What  the  people  want  is  not  charity,  but 
justice,  equal  opportunity,  and  above  all  sovereign 
power  over  their  own  industrial  and  commercial  activi- 
ties. Charity  they  disdain.  What  would  our  revolu- 
tionary fathers — the  Adamses,  Washington,  and  Patrick 
Henry, — have  said  if,  when  British  aggression  had 
begun,  the  British  people  had  voted  millions  in  charity 
to  the  colonies  while  still  retaining  despotic  power? 
Would  not  our  fathers  have  repudiated  such  charity 
with  contempt  and  said,  "What  we  want  is  not  charity 


244  EFFECTIVE    INDUSTRIAL    REFORM. 

but  justice  and  sovereign  control  over  our  own  affairs?" 
And  such  is  the  demand  of  the  people  to-day.  It  is  he 
who  sees  this  that  is  the  man  of  vision  and  is  the  true 
friend  of  the  people.  And  that  man  who  will  lead  the 
people  successfully  up  to  victory  in  this  struggle  for 
justice  and  sovereign  power  in  the  industrial  and  com- 
mercial world,  is  the  man  who  will  be  gratefully  remem- 
bered by  coming  generations  and  will  place  his  name 
beside  that  of  Washington  and  Lincoln. 


The  Public  School. 


In  the  new  era,  the  aim  of  education  will  be  to  perfect  each 
boy  and  girl  individually,  and  yet  to  train  each  also  as  a  member 
of  organized  society,  responsible  for  the  well-being  of  all. 


CHAPTER  XVI. 

RESPONSIBILITY  OF  THE  CHURCH  FOR 
INDUSTRIAL    REFORM. 

The  church  has  not  always  grasped  the  largeness  of 
her  mission  nor  felt  the  full  measure  of  responsibility- 
laid  on  her  by  her  Founder. 

The  aim  of  Christ  was  evidently  to  transform,  not 
only  the  individual,  but  also  human  society.  For  man 
in  all  his  higher  powers  is  a  social  being  and  reaches 
perfection  only  when  he  comes  under  social  obligations 
and  enters  into  social  relations. 

The  divine  ideal  of  a  perfect  man  is  not  one  living 
by  himself;  but  one  who  has  a  wife  by  his  side,  a  group 
of  children  dependent  upon  him;  and  who  lives  in  frater- 
nal and  co-operative  relations  with  the  whole  human  race. 

And  the  divine  ideal  of  perfected  humanity  is 
not  a  number  of  individuals,  each  living  by  himself 
with  no  social  relationship  with  others;  but  it  is  a 
group  of  men  and  women,  united  in  bonds  of  mutual 
interest  and  affection,  and  organized  for  the  most  effic- 
ient performance  of  their  common  functions. 

And  such  a  society  is  not  created  merely  by  aggre- 
gating together  a  group  of  perfected  men  and  women. 
They  must  also  come  into  right  social  relationships  and 
under  a  right  social  organization. 

For  it  is  conceivable  that  a  group  of  men  and  women, 
pure  minded  and  individually  perfect,  might  come 
together  and,  ignorant  of  social  law  or  misled  by  false 
teachers,  they  might  found  the  family  on  the  basis  of 
polygamy,  their  industrial   system  on  the  relationship 


246  EFFECTIVE    INDUSTRIAL    REFORM. 

of  master  and  slave  and  their  political  system  on  the 
basis  of  an  absolute  autocracy.  But  would  a  group  of 
men  and  women,  however  perfect  individually,  consti- 
tute a  perfect  society  under  such  social  relations?  No, 
for  history  declares  that  polygamy,  the  relation  of  master 
and  slave,  autocracy,  result  in  unspeakable  wrong  and 
the  utter  degredation  of  the  race. 

And  this  leads  to  the  affirmation  that  it  is  impossible 
to  develop  and  maintain  a  perfect  manhood  and  woman- 
hood without  a  perfect  social  organization.  Defective 
institutions  create  a  soil  and  an  atmosphere  in  which 
individual  character  cannot  grow. 

It  follows,  therefore,  that  when  Jesus  contemplated 
saving  the  world,  he  aimed  not  only  to  transform 
the  individual  man  and  woman,  but  also  the  family, 
the  industrial  world,  civil  government,  the  school,  the 
church  itself,  in  short,  the  whole  of  human  society  in 
its  institutions  and  laws.  The  great  principles  of  justice, 
equality,  fraternity  and  co-operation  which  he  taught, 
were  designed  to  be  the  foundations  not  only  of  individ- 
ual character  and  conduct,  but  also  of  communities  and 
nations.  And  he  designed  to  so  permeate  the  great 
plant  called  civilization  with  his  spirit  and  principles 
that  justice  and  good-will  should  rule  in  every  part,  and 
humanity  should  form  one  divine  family  of  Man. 

2. 

The  same  conclusion  is  reached  by  approaching  the 
subject  from  another  standpoint.  Jesus  bore  on  his 
heart  the  griefs  and  the  sorrows  of  the  world,  and  he 
resolved  to  remove  them.  But  the  sorrows  and  the 
griefs   of  the   world   are   of  two   classes.     First,    those 


Methodist  Episcopal  Church — Pittsfield,  Mass. 
One  of  the  most  important  functions  of  the  Church  is  to  inves- 
tigate those  sources  of  wrong  that   lie   hidden  in  institutions  and 
laws.     This  investigation  should  be  as  rigid  as  fate  and  as  impartial 
as  the  j  udgment  of  the  Almighty. 


RESPONSIBILITY  OF  CHURCH  FOR  INDUSTRIAL  REFORM.  247 

arising  from  individual  errors;  and,  second,  those  arising 
from  social  wrongs.  Now,  Jesus  evidently  bore  both 
classes  of  wrongs  on  his  heart  and  aimed  to  remove 
both. 

He  saw  for  example  not  only  wives  and  children 
suffering  from  ill-treatment  inflicted  by  bad  husbands 
and  fathers,  and  aged  parents  suffering  from  the  in- 
gratitude and  cruelty  of  children,  but  also  the  burdens 
heaped  upon  men  by  organized  oppression,  by  wars 
created  by  ambitious  leaders,  and  by  merciless  tax- 
gatherers,  who  were  the  agents  of  despotic  power.  And 
his  aim  doubtless  was  to  remove  both  forms  of  wrong. 
When  Jesus  took  the  little  children  in  his  arms  and 
blessed  them,  he  evidently  thought  not  only  of  the 
wrongs  heaped  upon  childhood  by  the  ignorance  of 
parents,  but  also  by  a  greedy  industrial  system  which 
forced  them  to  labor  in  their  tender  years,  deprived 
them  of  a  mother's  care,  and  often  sold  them  into  hope- 
less slavery.  And  he  doubtlessly  aimed  to  remove 
both  forms  of  wrong  until  childhood,  as  well  as  man- 
hood and  womanhood,  would  he  amply  protected. 

But  to  remove  these  larger  organized  wrongs,  it  is 
necessary  to  transform  human  society  itself.  We  must 
often  introduce  radical  reforms ;  we  must  construct  new 
systems,  industrial,  political  and  religious.  And  this, 
without  doubt,  was  Christ's  ultimate  aim.  Before  his 
mind  there  evidently  arose  a  vision  of  a  perfected  hu- 
manity, embracing  not  only  regenerated  men  and 
women,  but  also  perfected  institutions  and  laws.  And 
this  perfect  humanity  was  not  to  be  something  rigidly 
fixed,  but  a  living  growing  organization,  ever  changing 


248  EFFECTIVE    INDUSTRIAL    REFORM. 

in  the  process  of  growth,  but  always  embodying  and  work- 
ing out  the  same  great  principles  of  justice  and  mercy . 

And  Christ's  vision  embraced  the  whole  of  humanity. 
His  love  was  not  restricted  to  any  one  class  or  race.  It 
embraced  every  human  soul ;  it  sought  to  bring  to  every 
one  the  rich  bounty  and  the  good  favor  of  God,  and  to 
lift  every  human  soul  into  right  organic  relations  of 
sovereignty  and  power  with  the  rest  of  the  race. 

3. 

Again  Christ's  words  to  love  one's  neighbor  as  ones- 
self  implies  the  moral  obligation  to  cure  those  sources 
of  wrong  that  lie  in  institutions  and  laws.  In  no  other 
way  can  love  so  prove  its  reality  and  confer  such  last- 
ing benefits  on  mankind.  The  man  who  prior  to  1861 
helped  a  slave  to  freedom  did  an  act  of  kindness;  but 
Abraham  Lincoln,  who  signed  the  Emancipation  Procla- 
mation, performed  a  far  greater  act  of  love,  for  he  de- 
stroyed slavery  itself  and  freed  a  race.  To  love  one's 
neighbor  does  not  mean  merely  to  exercise  a  kindly  sen- 
timent toward  him,  but  to  renounce  every  unjust  ad- 
vantage, and  to  right  every  wrong.  If  the  Czar  of  Rus- 
sia loved  his  neighbor  as  himself  he  would  renounce 
autocracy,  that  great  source  of  oppression  and  blood > 
and  proclaim  at  once  a  democracy  and  so  give  his  peo- 
ple equal  sovereignty  with  himself.  And  if  in  America 
we  loved  our  neighbor  as  ourself ,  we  would  renounce  the 
present  industrial  system,  which  is  unjust  and  despotic, 
and  create  a  new  industrial  system  that  would  bring 
justice  and  equal  sovereign  power  to  every  class.  That 
spirit  of  Despotic  Power  which  in  various  forms  and 
ways  seeks  to  dominate  over,  and  despoil  humanity,  the 


RESPONSIBILITY  OF  CHURCH  FOR  INDUSTRIAL  REFORM.   249 

Bible  calls  by  the  significant  title  of  "the  Beast."  And  all 
who  partake  of  the  spirit  of  domination  and  are  willing  to 
live  by  taking  an  unjust  advantage  over  others,  are  the 
children  of  the  Beast  and  have  his  mark  in  their  fore- 
heads. It  is  these  who  constitute  the  real  "  lower 
classes"  of  society.  While  the  true  nobility,  the  true 
higher  classes,  are  those  in  every  rank, — found  in  large 
numbers  among  mill-hands  and  the  very  poor, — who 
are  governed  by  the  spirit  of  justice  and  fair  play,  and 
seek  to  bring  justice  and  equal  sovereign  power  to  every 
soul. 

4. 

But  some  one  asks — is  it  not  a  fact  that  Jesus  con- 
fined his  work  to  individuals,  and  is  it  not  true  that  he 
refrained  from  attacking  the  social  wrongs  of  his  time? 
Where  do  we  hear,  for  example,  a  word  from  his  lips 
against  human  slavery  or  the  amphitheatre,  or  that 
political  despotism,  which  marked  his  day? 

In  reply  to  this  question  the  following  explanation 
must  be  made.  Jesus  in  introducing  his  work  had  to 
begin  at  the  very  beginning.  And  this  of  necessity 
consisted  merely  in  going  from  man  to  man  and  im- 
parting to  them  his  great  idea, — and  often  even  in  less 
than  this.  It  consisted  often  merely  in  discipling  men 
to  himself — making  them  pupils,  learners  at  his  feet  in 
order  that  later,  when  their  minds  were  sufficiently 
developed,  they  might  then  grasp  his  great  idea. 

Had  Christ  attempted  more  than  this  at  that  time, 
he  would  have  jeopardized  his  whole  work.  But  while 
Jesus  was  laying  the  foundations,  he  had  in  mind  a  vision 
of  all  humanity  redeemed, — a  vision  of  perfected   men 


250         EFFECTIVE  INDUSTRIAL  REFORM. 

and  women  organized  into  a  perfect  society,  and  so 
constituting  a  divine  family  of  man. 

Since  this  was  Christ's  great  aim,  such  should  also 
be  the  aim  of  the  church.  And  the  church  should 
appreciate  the  moral  grandeur  of  her  mission  and  feel 
the  moral  obligation  of  achieving  it. 

It  follows,  therefore,  that  the  church  should,  like 
her  Lord,  bear  upon  her  heart  the  great  burden  of  the 
sin  and  the  wrongs  of  humanity.  No  human  soul  should 
be  so  insignificant  as  to  escape  her  love  and  care.  Her 
vision,  like  that  of  her  Lord,  must  embrace  the  whole 
of  human  society.  Her  aim  must  be  to  reach  all,  to 
redeem  all,  to  right  the  wrongs  of  every  class,  to  cure 
those  sources  of  wrong  that  lie  in  institutions  and  laws, 
and  to  make  every  soul  an  equal  sovereign  factor  in  the 
great  whole  of  Human  Society. 

And  the  church  should  especially  espouse  the  cause 
of  the  oppressed. 

The  Old  Testament  Preacher  said, — 

"  So  I  returned  and  considered  all  the  oppressions 
that  are  done  under  the  sun  and  behold  the  tears  of 
such  as  were  oppressed,  and  they  had  no  comforter: 
and  on  the  side  of  their  oppressor  there  was  power;  but 
they  had  no  comforter."      (Eccl.  4:1.) 

Now  Jesus,  himself  the  friend  of  the  oppressed,  de- 
signed that  so  long  as  his  church  should  endure  the  op- 
pressed should  have  in  her  a  friend  and  a  comfortor. 

God  has  created  all  men  potentially  equal,  but  all 
are  not  equally  developed.  Many  individuals,  and  cer- 
tain races  are  backward  in  development.  And  this 
backwardness  is  often  the  fruit  of  ages  of  oppression. 


RESPONSIBILITY  OF  CHURCH  FOR  INDUSTRIAL  REFORM.  251 

It  often  results  from  bad  training  in  childhood,  or  from 
poverty  caused  by  a  bad  system.  But  though  men  are 
actually  unequal  yet  they  are  potentially  equal, — and 
under  right  conditions,  all  classes  will  in  .time  rise  to 
the  same  level. 

But  the  forces  of  greed  deny  this  truth  and  would 
make  the  world  believe  that  certain  classes  are  inherently 
and  forever  inferior.  And  they  would  make  this  alleged 
inferiority  a  plea  in  justification  of  oppression.  Instead 
of  lifting  up  the  weak,  they  would  make  them  the  ser- 
vants, the  slaves  of  the  strong,  and  so  plunge  them  into 
greater  weakness  and  inferiority. 

But  all  this  is  contrary  to  the  spirit  of  Christ. 

Hence,  it  is  the  divine  mission  of  the  church  ever 
to  proclaim  the  inherent  equality  of  man  with  man. 
There  is  a  difference  in  degree  of  development,  but 
equality  of  inherent  power.  And  she  should  say  to  the 
forces  of  oppression.  "  Hands  off.  You  shall  not  take 
advantage  of  the  backward  condition  of  certain  classes, 
to  oppress  them  and  plunge  them  into  greater  weakness 
and  incapacity."  "  The  weak  shall  be  given  a  chance  to 
grow  strong,  and  the  belated  classes  to  catch  up  with  the 
rest  of  the  race  in  every  attainment."  And  she  should 
demand  that  human  society  shall  be  so  organized  as 
not  to  plunge  the  weak  into  greater  weakness,  but  to 
evoke  that  intellectual  strength,  that  virility  of  char- 
acter that  exists  potentially  in  every  soul  and  so  make 
all  men  actually,  even  as  now  they  are  potentially, 
equal.     This  should  ever  be  her  ideal  and  aim. 

And  in  consecrating  herself  to  this  task  the  church 
should  remember  that,  like  her  Master,  she  has  come 


252  EFFECTIVE    INDUSTRIAL    REFORM. 

not  to  be  ministered  unto  but  to  minister  and  give  her 
life  a  ransom  for  the  many. 

If  the  Church  fails  in  this  her  grand  work,  there  is 
no  other  institution  to  take  her  place.  The  function 
of  civil  government  is  to  maintain  law  and  order  in 
obedience  to  the  will  of  the  people.  The  work  of  the 
public  school  is  to  train  the  intellectual  faculties,  teach 
scientific  truth,  and  develop  the  constructive  and  creative 
powers  of  hand  and  brain.  But  the  function  of  the 
Church  is  to  train  the  world  in  Righteousness,  to  defend 
the  weak,  and  create  a  perfect  Humanity.  If  she  fails 
in  this  her  great  function,  no  other  institution  can  be 
found  to  take  her  place. 

5. 

Now  the  signs  of  the  time  indicate  that  the  period 
has  come  when  the  church  must  realize  her  great  aim 
and  begin  this  work  of  social  reconstruction.  For  the 
world  is  fast  ripening  for  such  reconstruction  and  re- 
form. Every  where  the  insistent  demand  is  made  that 
humanity  shall  at  once  arise  to  her  best,  and  that  the 
hideous  wrongs,  that  have  filled  the  ages  with  woe  shall 
be  abolished.  And  the  world  is  looking  to  the  church 
for  leadership  in  this  great  reform.  If  she  fails  to  give 
it,  she  will  reap  the  curses  and  the  contempt  of  mankind, 
— just  as  she  has  again  and  again  in  the  past  when  she 
has  espoused  the  side  of  oppression  and  wrong. 

Farthermore,  the  church  seems  to  have  accomplished 
all  that  can  be  accomplished  by  work  merely  in  the 
individual  man.  And  unless  she  now  resolutely  ad- 
vances to  the  next  phase  of  her  work,  she  will  lose  the 
ground  already  gained. 


St.  Charles  Roman  Catholic  Church,  Pittsfield,  Mass. 
That  church  which  resolutely  demands  a  rigid  investigation  of 
present  Industrial  conditions,  with  a  view  to  their  reformation, 
hears  God's  call. 


RESPONSIBILITY  OF  CHURCH  FOR  INDUSTRIAL  REFORM.  253 

When  ten  thousand  persons  on  the  last  great  night 
of  the  Chapman  meetings  in  Boston,  in  1909,  stood  and 
covenanted  with  one  another  to  do  everything  in  their 
power  toward  purifying  political  and  industrial  life, 
they  took  a  step  in  the  right  direction.  And  religious 
revivals  must  do  this  kind  of  work  more  and  more  in 
the  future,  if  they  are  to  accomplish  the  aim  of  Christ. 

Human  progress  can  never  stop  when  half  way  up 
the  steep.  Only  when  the  summit  is  reached  can  we 
pause  and  take  breath.  And  the  summit  to  which  the 
church  must  attain  is  a  renovated  and  redeemed  Society. 

Assuming,  then,  that  social  reconstruction  is  im- 
perative, and  that  the  Church  must  take  it  up, — where 
is  the  chief  point  of  attack  in  America,  to-day? 

The  chief  point  of  attack  in  America  is  our  Indus- 
trial and  Economic  System.  For  the  evils  of  our  Indus- 
trial and  Economic  system  underlie  and  give  support  to 
every  other  wrong. 

For  first  our  defective  industrial  system  is  the  chief 
cause  of  poverty  and  all  the  ignorance  and  injustice 
that  accompany  it.  They  are  wrong  who  say  that 
intemperance  and  lack  of  thrift  are  the  chief  causes  of 
the  poverty  of  the  poor.  For  the  great  majority  of  the 
poor  do  not  drink;  they  do  not  waste  their  money,  and 
they  work  hard.  Of  the  millions  of  women  in  our  fac- 
tories, nearly  all  are  the  wives  of  men  who  work  hard 
and  have  sober  habits.  The  women  who  take  in  wash- 
ings or  go  out  to  work,  are  wives  of  hard  working,  sober 
men.  Let  those  who  make  the  foregoing  charge  do  a 
little  investigation  and  see  if  I  am  not  stating  the  exact 
truth. 


254  EFFECTIVE    INDUSTRIAL    REFORM. 

And  if  we  should  abolish  every  saloon,  establish 
vocational  schools  and  postal  savings  banks,  the  terrible 
poverty  of  the  poor  would  continue  and  increase  as  now. 
In  Belgium  where  the  present  evil  system  has  reached 
perfection  the  people  have  postal  savings  banks  and 
industrial  schools,  and  they  have  developed  wonderful 
skill  and  thrift.  And  yet  they  remain  unspeakably 
poor,  simply  and  solely  because  of  the  merciless  greed 
of  the  millionaire  Capitalists  who  despoil  them.  (See 
Chap.  IV.)  And  such  is  the  chief  cause  of  poverty  in 
America.  And  for  the  people  to  be  more  thrifty,  will 
only  increase  the  amount  of  which  they  shall  be  despoiled. 

Second.  Until  we  reform  our  Industrial  and  Econ- 
omic System  the  church  will  fight  a  losing  battle  with 
the  slums,  with  rural  degeneracy  and  with  immorality 
and  intemperance. 

Summing  up  the  essence  of  Mr.  Charles  Booth's 
volumes  in  "Life  and  Labour  of  the  Poor  of  London," 
a  certain  person  says: — "Multitudes  of  Christian  men 
and  women  are  fighting  a  losing  battle  with  the  sin  and 
indifference  of  a  vast  city,  and  so  absorbed  in  the  des- 
perate strain  of  conflict  as  not  to  perceive  that  the  day 
is  going  against  them."  It  is  little  short  of  terrible — 
said  the  late  Charles  Cuthbert  Hall* — to  hear  so  earnest 
and  so  useful  a  man  as  Canon  Hensley  Henson  declare: 
— "  We  rise  from  a  study  of  Mr.  Booth's  gloomy  but 
fascinating  volumes  with  the  suspicion,  which,  might 
even  grow  into  conviction  that  Christianity  must  ap- 
proach the  masses  indirectly,  by  reforming  their  con- 
ditions of  existence  before  offering  them  its  spiritual 
message." 


RESPONSIBILITY  OF  CHURCH  FOR  INDUSTRIAL  REFORM.  255 

In  these  words  of  Canon  Henson  we  have  the  key- 
to  the  situation. 

Our  defective  industrial  system  creates  conditions 
which  destroy  the  home  in  all  the  lower  ranks  of  society 
and  this  breeds  vice,  ignorance,  intemperance,  immorality 
and  the  slums. 

Individuals  here  and  there  rise  out  of  the  very 
lowest  ranks,  but  an  increasing  number  sink  into  the 
slums  and  haunts  of  crime. 

The  terrible  fact  that  our  present  industrial  system 
tends  to  eliminate  the  higher  classes  by  race-suicide, 
and  to  call  in  and  perpetuate  the  lower  classes  by  giving 
them  the  job  means  to  fight  a  losing  battle  with  the 
saloon,  the  slums  and  every  form  of  vice.  If  we  visit 
one  of  our  paper  mills  or  our  cotton  or  woolen  factories, 
we  shall  be  struck  with  the  large  number  of  women 
working  there.  And  if  our  attention  is  called  to  it,  we 
will  be  equally  astonished  at  the  number  of  women 
among  the  poor  who  go  out  every  day  to  do  washing  or 
housework  for  their  wealthier  neighbors.  Many  more 
take  in  work  which  occupies  time  and  strength.  It  is 
said  that  in  Belgium  one  out  of  every  three  workers 
in  factory  and  on  the  farm  is  a  woman.  We  are  ap- 
proaching a  similar  condition  in  this  country. 

Do  we  ever  think  why  so  many  women  are  thus  doing 
man's  work} 

It  is  because  of  the  terrible  pressure  of  an  unjust 
economic  system,  which  pays  such  low  wages  to  the 
men  that  the  wives  and  mothers  must  become  wage 
earners  to  support  life. 

Do   we   think  what  this  means  in   relation  to   the 


256  EFFECTIVE    INDUSTRIAL    REFORM. 

home?  It  means  the  destruction  of  the  home  among 
the  lower  one-third  or  one-half  of  human  society.  It 
means  the  creation  of  a  soil  in  which  human  character 
cannot  grow.  It  means  the  growing  up  of  children  on 
the  streets,  with  no  mother's  care  or  uplifting  influence 
surrounding  them;  it  means  the  creation  of  idlers  and 
drunkards;  it  means  the  creation  of  the  saloons  and 
the  slums.  And  so  long  as  the  present  industrial  system 
exists,  we  shall  fight  a  losing  battle  against  these  evils. 
If  any  clergyman  is  reading  these  lines  I  would  like  to 
ask  him  to  put  himself  in  the  place  of  these  lowly  work- 
ers among  the  poor;  and  I  would  say  to  him — "  Imagine 
yourself  earning  an  income  of  only  $500  a  year  or  less, 
and  with  absolutely  no  friend,  no  generous  parishioner, 
to  help  you  out.  Imagine  your  wife  compelled  to  work 
in  the  factory  or  to  go  out  every  day  and  wash  for  a 
dollar  or  a  dollar  and  a  half  a  day.  Imagine  your  chil- 
dren, from  the  infant  two  days  old  up  to  the  child  of 
ten,  left  alone  at  home  all  day  with  no  one  to  watch 
over  them.  And  how  much  joy  would  you  get  out 
of  life,  and  what  hope  would  you  have  that  your  chil- 
dren would  grow  up  to  an  intelligent,  aspiring  and  pure 
manhood  and  womanhood?  Would  you  not  feel  it 
inevitable  that  some  of  your  boys  would  grow  up  to 
be  idlers  in  the  streets,  intemperate,  and  some  of  them 
even  criminal?" 

Would  you  not  exclaim,  "  Children  must  have 
a  mother's  care?  How  can  I  expect  my  children  to 
amount  to  anything,  if  they  run  uncared  for  in  the 
streets,  while  their  mother  is  compelled  to  work  in  the 
factory  or  over  her  neighbor's  wash  tub?" 


RESPONSIBILITY  OF  CHURCH  FOR  INDUSTRIAL  REFORM.    257 

And  yet  such  are  the  conditions  under  which,  per- 
haps one  third  of  the  children  of  the  United  States 
grow  up.  And  those  conditions  are  created  by  our 
unjust,  despotic,  Industrial  system  in  which  greed  sits 
enthroned. 

Not  until  we  reform  our  industrial  system,  there- 
fore, can  we  fight  anything  but  a  losing  battle  against 
poverty,  ignorance,  idleness,  the  slums  and  the  vices  of 
intemperance  and  immorality.  But  let  us  once  adopt 
the  system  unfolded  in  this  book  and  thereby  release 
these  wives  and  mothers  from  work  in  the  factory. 
Let  them  go  where  their  hearts  are,  and  where  they  of 
right  ought  to  be — into  their  own  homes  with  their  own 
children;    and  all  these  evil  conditions  will  be  changed. 

These  mothers  in  the  factory  love  their  children  as 
truly  as  any  other  mothers.  And  they  will  bring  them 
up  as  carefully,  if  we  but  give  them  the  chance.  The 
adoption  of  our  plan  will  give  them  this  chance  and  so 
change  the  face  of  society. 

Again  it  is  the  Industrial  and  Economic  Problem 
which  lies  behind  and  controls  the  problem  of  Immigra- 
tion, one  of  the  most  vital  problems  affecting  the  life 
and  civilization  of  America.  For  the  forces  promoting 
Immigration  are  at  present  the  forces  of  greed  which 
care  neither  for  the  good  of  the  immigrant,  the  rights  of 
the  people  already  here  nor  the  welfare  of  the  country. 
And  so  long  as  our  industrial  system  is  what  it  is,  we 
can  not  touch  the  problem.  But  let  us  once  become 
masters  of  the  industrial  situation,  let  us  once  adopt 
the  system  proposed  in  this  book  and  then  we  shall 
be  masters  of  the  problem  of  Immigration  also. 


258  EFFECTIVE    INDUSTRIAL    REFORM. 

The  Industrial  and  Economic  Problem  lies  behind 
the  important  problems  of  the  lodging  house  and  its  out- 
growth the  house  of  prostitution. 

The  Industrial  and  Economic  problem  lies  also  be- 
hind the  problem  of  political  corruption.  For  so  long 
as  a  despotic  oligarchy  rules  the  industrial  world,  and 
so  long  as  it  is  the  interest  of  that  oligarchy  to  put  cor- 
rupt men  into  office  to  guard  their  corrupt  interests, 
the  people  will  be  helpless.  Preachers  may  preach  and 
reforms  may  agitate  and  at  times  a  few  bad  men  may 
be  brought  to  trial  as  in  St.  Louis,  in  1906  and  San 
Francisco  in  1908.  But  after  each  reform  corruption 
will  inevitably  return,  and  we  shall  see  no  appreciable 
lessening  of  the  evil. 

But  let  us  once  adopt  the  plan  unfolded  in  this 
book  and  let  us  become  master's  of  the  Industrial  system 
and  we  shall  be  in  control  of  the  political  situation  also, 
and  our  cities  shall  be  purified. 

The  Industrial  and  Economic  problem  lies  behind 
the  religious  problem.  The  condition  of  religion  and 
religious  institutions  in  America  is  simply  chaotic,  and 
we  are  descending  with  appalling  rapidity  to  a  lower 
and  still  lower  level.  Sooner  or  later  the  religious  prob- 
lems must  be  faced  by  the  most  intelligent  men  of  all 
religious  beliefs.  As  I  have  said,  our  religion  and  relig- 
ious institutions  determine  the  peoples  ideals  and  mould 
human  character  for  good  or  for  evil.  And  these  simply 
cannot  be  ignored. 

I  cannot  discuss  this  question  here;  but  it  is  a  simple 
fact  that  so  long  as  the  present  industrial  system  en- 
dures, with  its  destructive  effect  upon  all  Christian  ideals, 


RESPONSIBILITY  OF  CHURCH  FOR  INDUSTRIAL  REFORM.   259 

with  its  perpetual  elimination  of  the  best  and  calling  in 
and  perpetuation  of  the  worst  elements  of  society,  there 
is  no  hope  of  religious  reform  and  reconstruction  in 
America.  Our  religious  condition  will  only  grow  more 
and  more  chaotic  and  inefficient  and  positively  evil. 

Finally  it  is  the  Industrial  and  Economic  problem 
that  lies  behind  the  great  problem  of  the  moral  degen- 
eration of  the  times.  There  is  a  spirit  abroad  in  society 
to-day  which  repudiates  all  moral  obligation  and  en- 
thrones the  law  of  one's  own  will  or  pleasure.  This 
evil  has  its  sources  in  the  Industrial  and  Commercial 
world.  For  human  life  cannot  permanently  enthrone 
moral  obligation  in  one  realm  and  repudiate  it  in  an- 
other. The  whole  of  human  life  must  become  either  all 
moral  or  all  immoral.  "  Ye  cannot  serve  God  and 
Mammon."  Now  in  the  industrial  world,  we  have 
repudiated  the  supremacy  of  moral  obligation.  We 
justify  everything  that  will  win  the  almighty  dollar. 
When  a  certain  trust  was  on  trial  and  it  was  proven 
that  its  officials  had  corrupted  legislatures  in  its  behalf, 
the  judge  asked  the  official  of  the  trust,  if  he  thought 
such  conduct  to  be  justifiable.  The  official  replied 
that  he  did.  And  yet  at  that  very  time  that  man  was 
in  good  standing  in  a  Christian  church  and  superin- 
tendant  in  its  Sunday  School. 

But  we  cannot  repudiate  conscience,  patriotism  and 
all  moral  obligation  in  one  realm  without  repudiat- 
ing them  in  all  others  also.  And  this  is  the  tend- 
ency in  the  United  States  today.  Men  seem  to  have 
forgotten  how  to  take  any  moral  or  religious  obligation 
seriously.     And  whatever  one's  ambition  or  pleasure,  or 


260         EFFECTIVE  INDUSTRIAL  REFORM. 

even  one's  envy  or  hate  may  demand,  that  is  made  the 
law.  And  this  repudiation  of  moral  and  religious  ob- 
ligation is  sweeping  all  through  society,  and  even  through 
the  church  of  God. 

And  this  evil  tendency  has  its  source  and  center 
in  our  immoral  industrial  system  which  has  repudiated 
all  justice,  all  patriotism  and  all  religion  and  subor- 
dinated everything  to  the  greed  of  gain. 

Now  the  only  way  by  which  to  counteract  this  evil 
tendency  is  to  go  right  back  to  its  source  and  destroy 
it  there.  The  people  must  dethrone  the  power  of  a 
conscienceless,  despotic  oligarchy  and,  by  means  of 
some  such  plan  as  I  have  unfolded  in  this  book, 
they  must  assume  supreme  control  over  their  whole 
industrial  life.  They  must  enthrone  the  law  of  justice 
and  moral  obligation  there.  Doing  this,  we  shall 
check  this  evil  tendency  in  its  very  source.  And  again 
conscience,  justice,  right  will  become  supreme  through- 
out the  whole  of  human  life. 

We  see,  then,  that  it  is  true  that  this  problem  of 
Industrial  and  economic  reconstruction  lies,  indeed, 
behind  every  other  problem.  I  am  aware  that  we  shall 
never  have  a  renovated  America  until  we  shall  reform 
the  drink  habits  of  the  people,  and  above  all,  reform  the 
religious  life  and  institutions  of  America.  But  these  re- 
forms cannot  be  achieved  so  long  as  the  present  indus- 
trial system  endures. 

To  reform  our  industrial  and  economic  system,  there- 
fore, is  supremely  important  and  should  command 
the  foremost  attention  of  the  church  and  all  good  men. 
Nay,  more,  in  view  of  the  appalling    conditions  of   in- 


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RESPONSIBILITY  OF  CHURCH  FOR  INDUSTRIAL  REFORM.  261 

justice  that  prevail,  we  may  ask  whether  the  church 
or  any  Christian  man  can  refuse  to  enter  upon  industrial 
reform  and  escape  guilt  in  the  sight  of  God? 

The  merciful  Christ  on  whose  heart  was  borne  the 
burden  of  the  world's  sorrows,  affirmed  that  not  only 
the  man  who  caused  the  wrong  but  he  who  selfishly 
refused  to  rectify  it,  should  be  condemned  in  the  day  of 
judgment.  And  by  his  word,  embodying,  as  it  does, 
the  Voice  of  Eternal  Justice,  we  must  stand  or  fall. 
"  For  we  must  all  appear  before  the  judgment  seat  of 
Christ." 

6. 

Assuming  that  the  church  appreciates  the  moral 
obligation  resting  upon  her  and  that  she  hears  the  voice 
of  God  calling  her  to  this  great  reform,  what  steps  should 
she  take? 

First  Step — to  Investigate  the  Facts  in  the  Case. 

The  first  step  of  the  Church  should  be  to  meet  and, 
in  conference  assembled,  with  resolute  determination, 
appoint  experts  to  get  the  facts  in  the  case. 

These  "experts  should  be  asked  to  go  through  all 
our  shops  and  factories  and  learn  the  exact  wages  paid 
to  the  men — from  the  lowest  to  the  highest; — the  num- 
ber of  women  especially  wives  and  mothers  at  work, — 
the  condition  of  the  homes  from  which  these  mothers 
are  taken,  what  the  children  are  doing  during  the  day 
while  the  mother  is  absent, — in  short,  they  should 
learn  all  the  facts  as  to  the  justice  or  injustice  of  our 
present  system  and  its  effect  on  every  class.  And  these 
experts  should  study  the  lives  of  the  rich  and  see  whether 


262         EFFECTIVE  INDUSTRIAL  REFORM. 

they  are  any  more  worthy  of  leisure  and  luxury  than 
their  humbler  neighbors  whose  lives  are  filled  with  toil. 

When  we  thus  have  gotten  at  the  facts  let  the 
church  study  them  and  absorb  them  until  they  become 
a  vital  force  in  the  mind. 

This  is  the  first  step. 

The  Second  Step, — to  Find  the  Right  Method  of  Reform. 

When  the  church  has  thus  possessed  herself  of  the 
facts,  the  next  step  is, — relying  upon  the  promise  that 
"if  we  ask  we  shall  receive  and  if  we  seek  we  shall  find," 
— to  seek  for  the  solution  of  the  great  problem  of  In- 
dustrial and  Economic  reform.  And  if  we  seek  for  it 
as  for  hidden  treasures,  the  right  solution  will  surely 
come.  The  trouble  with  the  church  to-day  is  its  indif- 
ference, its  lack  of  courage,  its  lack  of  faith. 

In  seeking  for  the  true  solution,  the  church  should 
call  before  her  councils,  expert  men.  She  should  give 
her  ear  also  to-  the  suggestions  of  humbler  minds,  to 
those  even  outside  the  church. 

The  best  reformers  have  often  come  from  men  of 
obscurity.  Doing  this,  in  a  short  time,  the  right  solu- 
tion of  the  problem  will  come. 

Third  Step — Agitation. 

Having  obtained  the  facts  and  found  the  solution — 
the  next  step  is  for  earnest  men  to  agitate — and  continue 
to  agitate — until  the  new  system  shall  be  adopted  and 
the  reform  shall  be  introduced. 

And  here  it  should  be  said  that  the  church  must 
guarantee  to  each  minister  of  the  Gospel  liberty  of  speech 
in  this  matter.     I  do  not  say  that  ministers  should 


RESPONSIBILITY  OF  CHURCH  FOR  INDUSTRIAL  REFORM.  263 

preach  theories  in  the  pulpit,  but  they  should  be  per- 
mitted to  advocate  industrial  reconstruction  outside  of 
the  pulpit  without  prejudice  or  loss  of  position.  And 
the  persistent  attempt  on  the  part  of  a  despotic  plutoc- 
racy to  repress  every  minister  who  ventures  to  declare 
sympathy  with  reform  should  be  rebuked  by  the  church 
and  all  free  American  citizens  with  no  uncertain  sound. 

Such  is  the  method  of  procedure  to  be  adopted,  by 
the  church  or  any  part  of  the  church  or  any  other  body 
or  group  of  men  who  would  reform  the  present  indus- 
trial and  economic  system. 

7. 

In  conclusion,  I  would  appeal  to  all  lovers  of  human- 
ity, to  all  lovers  of  justice  and  fair-play,  to  all  patriots, 
to  all  Christians,  and  all  believers  in  every  religion 
whatsoever,  and  say — "  Will  you  not  join  heart  and 
soul  in  the  achievement  of  this  great  Reform?"  And 
to  the  strong  men  in  the  industrial  and  commercial 
world,  even  to  the  men  who  profit  by  the  present  evil 
system,  I  would  say, — "  Will  you  not  be  the  first  to  lead 
in  this  great  Reform?  Is  it  not  true  that  the  real 
gentleman  is  the  man  who,  when  he  learns  that  he  has 
inadvertently  trespassed  on  the  rights  of  another, 
is  glad  to  be  informed  of  the  wrong,  and  is  quick  to 
apologize  and  rectify  the  wrong?  And  is  not  he  the 
honest  man  who,  when  he  learns  that  his  line  fence 
stands  on  his  neighbors  land,  thanks  the  man  who  in- 
forms him  and  is  the  first  to  ask  that  the  fence  be 
moved?" 

Will  not  you  who  stand  at  the  head  of  our  vast 
industrial  system  show  the  same  nobility  of  heart  and 


264  EFFECTIVE    INDUSTRIAL    REFORM. 

mind?  Assuming  that  it  be  true  that  your  profits 
spring  from  a  system  that  is  unjust, — a  system  that 
annihilates  home-life,  deprives  little  children  of  a 
mother's  care  and  destroys  throughout  society  the  spirit 
of  moral  obligation, — will  you  not  prove  your  nobility 
of  mind  by  being  among  the  first  to  call  for  a  search- 
ing investigation  of  the  facts,  and  demand  a  reform? 
Can  you  do  less  than  this  and  escape  condemnation 
in  the  presence  of  that  Eternal  Justice,  before  whom  all 
must  stand  or  fall ? 

And  I  would  appeal  to  the  women  among  the  wealthy 
classes  and  say  to  them, — "Will  you  not  prove  your 
nobility  of  mind  by  investigating  these  things?  And 
when  you  find  that  your  riches  are  largely, — as  they 
surely  are, — the  product  of  the  unjust  toil  of  your 
humbler  sisters,  will  you  not  too  be  among  the  first 
to  say — "Let  this  evil  system  be  changed?"  And  will 
you  not  offer  your  wealth  to  bring  in  a  reform  that 
will  establish  justice  and  equal  opportunity  throughout 
the  world? 

Can  you  do  less  than  this  and  escape  guilt  for  the 
thousands  of  little  children  that  perish  every  year 
through  industrial  and  commercial  wrong?  Can  you 
do  less  and  hope  to  meet  your  Redeemer  face  to  face 
in  Heaven? 

Christian  people  often  sing — 

"  I  will  go  where  you  want  me  to  go,  Dear  Lord." 

Will  you  go  forth  to  the  work  of  sociological  Reform 
until  the  last  refuge  of  injustice  and  wrong  is  swept 
away? 


Mrs.  Russell  Sage. 

Who  gave  ten  millions  in  the  Russell  Sage  Foundation  to  in- 
vestigate the  causes  of  poverty. 

That  man  only  is  truly  converted  to  God  who  so  loves  his 
neighbor  that  he  will  resolutely  seek  to  investigate  social  conditions 
and  right  every  wrong. 


Mrs.  William  K.  Vanderbilt,  Sr. 

Who  gave  one  million  dollars  in  a  Model  Tennement  enterprise 
for  the  cure  of  tuberculosis  among  the  poor  in  New  York  City. 

Will  not  some  lover  of  humanity  give  $20,000  or  more  to  pro- 
mote the  reform  unfolded  in  this  book  and  thereby  strike  at  the 
root  of  poverty  and  disease? 


CHAPTER  XVII. 

A  FINAL  WORD  OF  ENCOURAGEMENT  AND 
WARNING. 

I  cannot  close  this  book  without  a  word  of  encour- 
agement and  warning  to  the  friends  of  reform. 

First,  a  word  of  warning. 

While  believing  firmly  in  the  ultimate  coming  of  re- 
form, the  people  must  be  on  their  guard  against 
measures  that  will  be  utterly  fruitless,  and  prove  an 
obstacle  to  true  reform. 

One  such  measure,  is  that  of  government  pensions. 
I  refer,  of  course  to  industrial  pensions.  Many  people 
seem  to  think  that  to  adopt  a  general  pension  system, 
is  at  least,  a  step  toward  the  cure  of  present  wrongs. 
And  already  certain  cities  pension  their  policeman  and 
teachers.  And  Mr.  Taft  has  recommended  the  pension- 
ing of  other  Government  employees. 

But  I  am  confident  that  such  a  system  will  effect 
no  cure  of  present  evils  either  under  our  present  indus- 
trial system  or  when  that  system  is  reformed.  It  will 
work  only  harm. 

In  the  first  place,  the  pension  system  will  not  cure 
present  evils  so  long  as  the  present  industrial  system 
exists.  For  the  gift  of  a  pension  will  serve  as  an  excuse 
to  the  present  oligarchy  to  decrease  wages  and  increase 
prices.  For  they  will  argue, — "  With  this  pension  com- 
ing to  the  working  man,  he  does  not  need  as  large  wages 
as  before,  and  he  can  afford  to  pay  higher  prices." 
And  the  gift  of  a  pension  will  be  followed  very  speedily 
by  a  decrease  in  wages  and  a  rise  in  prices.     And  even 


266  EFFECTIVE    INDUSTRIAL    REFORM. 

if  the  present  industrial  despotism  should  be  overthrown 
the  pension  system  would  still  prove  disastrous. 

For  the  pension  system  appeals  not  to  the  spirit  of 
self-help  but  to  the  predaceous  and  parasitic  spirit.  It 
awakens  the  hope  of  living  without  effort,  by  loading 
one's  self  onto  the  government.  And  this  prospect  is 
very  seductive  to  many  minds.  The  result  will  be  that 
the  moment  that  any  class  shall  be  placed  on  the  pen- 
sion list,  its  members  will  be  converted  into  a  semi- 
parasitic  and  semi-robber  class  making  ever  increasing 
demands  on  the  public  treasury.  They  will  take  no 
interest  in  industrial  reform.  But  they  will  form  them- 
selves into  an  organization  for  the  ostensible  purpose  of 
caring  for  their  members,  but  in  reality  to  protect  and 
ever  increase  this  special  privilege  of  drawing  money 
from  the  public  treasury.  And  no  person  will  dare 
lift  his  voice  against  the  system,  or  against  the  frauds 
committed  under  its  protection.  For  the  vast  pension 
organization  will  silently  mark  every  politician,  every 
statesman,  and  every  preacher  who  dares  to  discuss 
even  in  the  fairest  spirit  their  pension  privileges. 

Besides,  the  pension  system  destroys  individual 
responsibility  for  one's  self;  it  is  destructive  of  all 
independence  of  character  and  energy  of  mind.  Let  a 
man  once  be  placed  upon  the  free  pension  system,  and 
he  ceases  to  be  an  energetic  and  independent  factor 
in  our  national  life.  The  only  way  to  develop  strength 
of  character,  is  to  make  each  man  responsible  for  himself, 
and  to  stand  or  fall  by  his  own  efforts.  What  we  want 
in  our  industrial  system  is  equal  and  fair  opportunity 
for  each  soul.     We  must  make  conditions  such  that 


A  FINAL  WORD  OF  ENCOURAGEMENT  AND  WARNING. 267 

for  every  persevering  man,  there  is  a  sure  reward. 
But  having  done  this,  we  must  throw  each  man  onto 
his  own  feet  and  make  each  responsible  for  himself. 
He  who  wins  riches,  by  his  own  effort  will  not  be  ruined 
by  them.  But  a  small  pension,  coming  as  a  result  of 
no  effort  of  one's  own,  makes  the  pensioner  inactive, 
unaspiring,  parasitic. 

But  there  is  another  kind  of  a  pension  system  which 
is  rapidly  and  yet  silently  introducing  itself,  against 
which  the  people  should  be  most  seriously  warned.  I 
refer  to  the  pensioning  of  employees  by  the  Corporations. 

It  is  not  generally  known,  perhaps,  that  the  great 
corporations  are  rapidly  adopting  the  policy  of  pension- 
ing their  employees. 

Standard  Oil  has  long  since  adopted  this  policy. 
Said  W.  R.  King,  general  sales  agent  for  the  Standard 
Oil  company  of  New  York,  to  special  Examiner  Franklin 
Ferriss,  in  the  government's  suit  again  Standard  Oil 
company  in  1908, — 

"  When  a  man  is  60  years  old  and  has  been  twenty 
years  in  our  employ,  he  may  retire  and  for  ten  years  get 
half  of  his  average  salary  for  his  last  ten  years  service. 
After  that  he  gets  25%  of  his  average  salary  for  the 
rest  of  his  life."     (New  York  Times  May  28,  1908.) 

The  Railroads  are  adopting  the  same  policy.  The 
Grand  Trunk  railroad  which  has  its  eastern  terminus 
in  Portland  Maine,  put  into  effect  Jan.  1st  1908,  a  pen- 
sion system — embracing  every  employee  in  the  United 
States  and  Canada.  The  railroad  finances  the  whole 
scheme,  not  levying  any  assessment  on  the  employees. 
"  Under  the  new  rule  a  compulsory  retiring  age  is  fixed 


268  EFFECTIVE    INDUSTRIAL    REFORM. 

at  65,  while  any  employee  who  has  served  the  com- 
pany 15  years  or  more  will  be  entitled  to  a  pension  on 
a  graduated  scale.  A  minimum  pension  has  been  fixed 
at  $200  while  there  is  no  maximum." 

"  In  addition  to  this,  provision  has  been  made  for 
employees  who  have  been  disabled  in  the  company's 
service  and  also  for  men  dismissed  without  cause  under 
65,  but  have  not  served  over  15  years." 

Several  railroads  and  other  corporations  have 
adopted  this  policy  of  pensioning  their  employees. 

This  policy  is  wrong  and  perilous  in  the  extreme. 
First,  the  system  is  unjust.  If  these  men  do  not  earn 
the  amount  of  their  pensions,  they  ought  not  receive  it. 
If  they  do,  then  the  amount  should  be  paid  to  them  in 
the  form  of  wages  as  they  go  along.  Besides,  where 
will  all  this  money  come  from?  It  is  either  taken  in 
the  form  of  an  indirect  tax  out  of  the  laboring  men,  or, 
as  an  indirect  tax,  out  of  the  public.  For  the  railroad 
will  never  take  it  out  of  its  already  bloated  earnings. 
It  follows,  therefore,  that  either  the  laboring  men  or 
the  public  will  be  taxed  without  their  consent  for  a 
measure,  of  which  they  may  entirely  disapprove. 

Again.  The  measure  is  destructive  of  all  independ- 
ence of  character.  For  here  is  a  vast  corporation  pre- 
suming to  take  care  of  many  hundreds  of  thousands 
of  men, — to  provide  for  their  future,  in  part  at  least, 
without  asking  their  consent,  and  without  requiring 
them  to  exercise  any  forethought  in  the  matter.  They 
are  thus  made,  without  their  consent,  the  wards  of  a 
private  corporation  as  if  they  were  mere  children  or  slaves 
incapable  of  caring  for  themselves.     What  is  that  but 


A  FINAL  WORD  OF  ENCOURAGEMENT  AND  WARNING. 269 

paternalism  of  the  most  vicious  kind?  What  policy 
can  be  more  destructive  of  self-reliance  and  of  all 
independence  of  character? 

Again  this  system  will  not,  in  the  end,  increase  at 
all,  the  aggregate  earnings  of  labor.  For  the  corpora- 
tion will  sooner  or  later  make  the  gift  of  the  pension  a 
plea  for  a  reduction  of  wages.  And  it  will  open  the  way 
to  favoritism  and  special  privilege.  Large  pensions  will 
be  given  to  their  own  favorites  and  relatives.  But  very 
small  pensions  will  be  given  to  the  common  working 
people.  For  the  corporation  will  have  despotic  power 
in  the  matter. 

But  the  greatest  evil  connected  with  this  system  is 
that  while  having  the  appearance  of  benevolence,  it  is 
only  a  new  chain  with  which  to  enslave  the  people. 

For  take  the  case  of  Standard  Oil.  Here  is  a  man 
receiving  a  salary  say,  of  $1200  a  year.  At  the  age  of 
60  he  retires  on  a  pension  of  $600  a  year  for  ten  years, 
and  of  $300  a  year  for  the  rest  of  his  life, — providing  he 
is  svbservient  to  the  corporation. 

Now  the  hope  of  such  a  pension  will  act  not  only  as  a 
bribe,  but  it  will  ultimately  serve  as  a  chain  to  bind  the 
man  body  and  soul  in  allegiance  to  the  corporation. 
The  corporation  will  become,  like  the  mediaeval  baron, 
his  overlord,  to  whom  he  will  owe  supreme  allegiance. 

And  when  the  interests  of  the  country  and  the  cor- 
poration conflict,  the  pensioner  will  vote  for  the  cor- 
poration every  time.  Men  who  get  their  bread  and  but- 
ter from  the  corporation  and  are  looking  for  a  pension 
from  it  will  not  vote  against  it,  however  corrupt  the 
corporation  may  be.     The  corporation  will  be  to  them 


270  EFFECTIVE    INDUSTRIAL    REFORM. 

their  country,  the  authority  to  whom  they  will  owe 
supreme  allegiance.  And  when  the  people  are  seeking 
to  liberate  themselves  from  the  grasp  of  the  corporation, 
these  pensioners,  and  all  others  hoping  for  a  pension, 
will  oppose  every  effort  at  reform,  will  nullify  every 
expression  of  the  people's  will,  and  help  drag  all  down 
into  a  common  slavery  to  despotic  power. 

The  people  have  become  familiar  with  the  power  of 
the  railroads  through  the  distribution  of  free  passes 
and  other  means.  The  Literary  Digest  July  7th,  1907, 
abridging  Mr.  Sullivan's  article  in  Collier's  Weekly 
says, — "  A  recently  carefully  considered  statement  signed 
by  the  Episcopal  bishop  of  the  State  (New  Hampshire) , 
an  ex-judge,  of  the  Supreme  Court,  and  a  professor  of 
Dartmouth  College,  asserts  that  the  State  (New  Hamp- 
shire), is  held  in  a  form  "of  slavery."  By  means  of 
passes,  Mr.  Sullivan  states,  the  newspapers  and  the 
lawyers  of  the  State  are  "retained,"  in  the  interests  of 
the  Boston  and  Maine.  This  evil  was  so  great  that  a 
law  was  passed  by  Congress  forbidding  the  giving  of 
pass  and  reduced  rates  to  any  special  class.  But  it 
is  to  be  doubted  whether  the  evil  has  been  at  all  abated. 
Under  the  form  of  a  contract  for  services  rendered,  the 
evil  continues  as  great  as  before. 

Now  all  recognize  the  evil  of  rebates  and  free  passes. 
And  we  all  know  how  by  special  favors,  it  is  still  pos- 
sible for  great  corporations  and  political  leaders  to 
make  certain  influential  classes  subservient  to  their 
interests. 

Now  this  pensioning  of  employees  by  the  corpora- 
tions is  a  still  greater  evil. 


A  FINAL  WORD  OF  ENCOURAGEMENT  AND  WARNING. 271 

If  there  should  be  a  law  against  rebates  and  passes, 
there  should  be,  even  more,  a  strict  law  against  any 
private  corporation's  pensioning  its  employees.  If 
wages  are  not  high  enough,  let  them  be  raised.  But 
do  not  degrade  and  enslave  our  laboring  men  and  de- 
stroy our  liberties,  by  pensions. 

This  policy  of  the  corporations  reveals  the  astute- 
ness of  their  cunning  and  the  imperative  demand  that 
we  shall  speedily  adopt  some  wise  form  of  public  owner- 
ship that  the  people  may  be  supreme  and  the  pernicious 
power  of  the  despotic  corporation  be  overthrown  root 
and  branch. 

To  conclude.  Let  the  people  be  on  their  guard 
against  every  measure  which  increases  the  power  of 
plutocracy  and  destroys  the  independence  of  the  voter. 

Let  the  people  have  faith  in  themselves,  and  in  their 
power  to  take  care  of  themselves,  and  let  them  demand, 
not  charity — nor  any  paternal  system  which  is  disguised 
slavery, — but  the  sovereign  power  to  own  and  control 
their  own  industries  and  so  take  care  of  themselves. 
Organized  self-help  on  the  part  of  the  whole  people  con- 
stituted by  law  into  a  single  vast  Business  Corporation, 
owned  and  controlled  by  themselves,  must  be  the 
watchward  of  the  new  order. 

2. 

Finally,  let  no  one  feel  discouraged  at  the  greatness  of 
the  task  set  before  us.  Our  cause  is  just  and  justice 
though  delayed,  must  prevail.  If  plutocracy  has  the 
advantage  of  wealth  and  position,  remember  that  every- 
where the  mighty  forces  of  a  new  ideal  and  a  new 
religious  faith  are  laying  hold  of  the  world.     Witness  the 


272  EFFECTIVE    INDUSTRIAL    REFORM. 

uprising  of  the  people  in  Turkey  and  other  lands.  And 
the  whole  civilized  world  is  awaking  and  asking — Why 
should  the  present  industrial  regime  continue  when 
we  can  have  something  far  better  at  any  time  that  we 
demand  it?  America  scorns  to  use  the  old  wooden 
stick  to  plow  the  earth  when  she  can  have  the  modern 
steel-pointed  plow.  And  she  will  soon  scorn  to  retain 
the  present  inadequate,  unjust  industrial  system,  when 
she  can  have  a  new  well-organized  plan,  that  will  bring 
wealth  and  comfort,  with  justice  to  all. 

Then  there  is  the  rising  tide  of  modern  democracy. 
The  people  are  coming  to  know  their  power.  They 
have  long  been  hoodwinked  by  cunning  men.  They  have 
been  made  to  believe  that  it  was  not  safe  to  trust  in 
themselves.  They  have  been  depressed  o,nd  trodden 
under  foot.  But  they  are  coming  to  know  their  power 
to  demand  their  rights  and  their  ability  to  manage  their 
own  affairs.  They  already  possess  the  ballot.  And  some 
fine  day  they  shall  awake  and  sweep  the  whole  intoler- 
able system  of  injustice,  fraud  and  arrogant  power, 
forever  away.  Furthermore,  the  people  are  coming  to 
believe  everywhere  in  organized  co-operation,  directed 
by  the  sovereign  will  of  the  people.  And  this  spirit  is 
destined  to  sweep  away  the  present  system  of  individ- 
ualistic disorder  and  strife,  and  bring  in  a  new  heaven 
and  a  new  earth. 

It  is,  therefore,  the  part  of  all  lovers  of  justice,  to  ag- 
itate and  still  to  agitate — until  the  people  arise  and  come 
into  their  own.  What  the  people  need  is  faith, — a  belief 
that  no  obstacles  can  stand  in  the  way  of  Eternal  Jus- 
tice and  the   sovereign   will   of  the  people.     Said  the 


Town  Hall. 
In  America,  the  people  are  supreme.     When  the  people  declare,  by 
majority  vote,  for  Industrial  reform,  Industrial  reform  will  come  and  it 
will  prove  a  success. 


A  FINAL  WORD  OF  ENCOURAGEMENT  AND  WARNING. 273 

Teacher  of  Galilee, — "//  ye  have  faith  and  doubt  not,  and 
shall  say  to  this  mountain  be  thou  removed  and  be  thou 
cast  into  the  sea,  IT  SHALL  BE  DONE." 

THE    END. 


APPENDIXES. 

APPENDIX  I.— THE  FORCES  PROMOTING 

IMMIGRATION  (See  p.  119). 

From  "Poverty,"  p.  273,  by  Robert  Hunter. 

"It  should  be  realized  that  the  forces  promoting 
immigration  are  selfish  forces  caring  neither  for  the 
welfare  of  the  country  nor  for  the  welfare  of  the  immi- 
grant. Whenever  a  bill  comes  before  Congress  to  re- 
strict immigration,  every  effort  is  made  by  these  private 
interests  to  prevent  its  passage.  A  few  years  ago  the 
following  letter  was  sent  out  by  a  general  agent  of  the 
North  German  Lloyd  Steamship  Company  to  their 
many  agencies  in  all  parts  of  this  country: — 

'Immigration  bill  comes  up  in  the  House  Wednes- 
day. Wire  your  congressman,  our  expense,  protesting 
against  proposed  exclusion  and  requesting  bill  be  de- 
feated, informing  him  that  vote  in  favor  means  defeat 
next  election. 

(Signed) 

H.  Claussenius  &  Co.' 

"Similar  intimidating  telegrams  were  sent  to  every 
newspaper  in  which  the  steamship  companies  adver- 
tised. Official  testimony  also  shows  that  bribery  in 
the  form  of  passes,  given  to  the  editors  and  proprietors 
of  newspapers,  has  helped  to  create  newspaper  opposi- 
tion to  restrictive  legislation. 

"The  class  of  large  employers  most  active  in  pre- 
venting the  restriction  of  immigration  have  usually 
been  those  paying  the  smallest  wages.  A  representa- 
tive of  the  Southern  Pacific  Railroad,  appearing  before 


276  .  APPENDIXES. 

the  Committee  of  the  United  States  Senate  on  Immi- 
gration in  1902,  for  the  purpose  of  opposing  restriction, 
claimed  that  the  railroad  was  unable  to  get  sufficient 
workmen.  The  Commissioner  General  of  Immigration, 
knowing  well  the  wages  and  conditions  of  railway- 
workmen,  said,  "Let  it  pay  living  wages  and  it  will 
have  laborers  enough."  The  wages  paid  by  the  South- 
ern Pacific,  as  shown  before  the  same  committee,  were 
from  $1.16  to  $1.39  a  day,  or,  in  other  terms,  from  $350 
to  $425  a  year.  Those  employers  who  use  every  means, 
fair  or  foul,  to  obtain  an  over  supply  of  laborers,  and, 
in  this  way,  to  force  wages  down  to  the  lowest  possible 
limit,  should  be  classed  among  the  dangerous  elements 
of  any  country. 

"In  order  to  keep  wages  down  and  prevent  the 
growth  of  'trade  unions,  many  employers  advocate  un- 
limited immigration,' — and  the  mixing  of  men  of  dif- 
ferent nationalities.  Where  there  is  an  over-supply 
of  laborers  of  many  different  nationalities,  it  is  almost 
impossible  to  organize  the  workers  until  suffering  makes 
the  men  realize  the  necessity  of  union — In  this  way  the 
selfish  interests  create  serious  social  problems  by  pro- 
moting excessive  immigration." 


APPENDIX    II.— WAGES  OF  IMMIGRANT 
LABOR  (See  p.  120) 

From  ''Poverty,"  p.  277-8,  By  Robert  Hunter. 

"During  the  year  of  the  investigation — (made  by 
the  Department  of  Labor  at  Washington,  in  the  investi- 
gation of  the  Italians  in  Chicago) — the  Italian  work- 
man was  actually  employed  on  an  average  but  little 
more  than  four  months  out  of  the  twelve.  The  average 
wage  of  the  Italian  workman  was  less  than  $6  a  week,  and, 
in  the  most  unskilled  trades,  it  fell  in  one  class  to  $5, 
and  in  another  as  low  as  $4.37.  These  wages  and  these 
long  months  of  unwilling  idleness,  mean  wretched  poverty. 
They  mean  starvation,  insanity,  and  tuberculosis.  The 
local  doctor  will  tell  that  there  is  great  prevalence  of 
rickets  among  the  Italian  children,  a  disease  due  to 
malnutrition;  the  settlement  worker  will  tell  you  that 
the  child  is  taken  at  the  earliest  hour  from  the 
school  and  sent  to  work;  the  woman  is  taken  from  her 
children  and  set  to  work;  the  neglected  children  are 
left  to  the  vice  and  crime  taught  by  the  street  gang; 
the  policeman  will  tell  you,  if  you  ask,  that  the  Italians 
of  the  poorest  class  obtain  their  food  to  a  large  extent 
from  the  garbage  boxes.  He  will  also  tell  you  that  the 
fighting  and  the  drunkenness  result  naturally  from 
unwilling  idleness." 

"The  wages  given  above  do  not,  however,  represent 
the  extent  of  their  poverty.  The  padrone  must  get 
his  commissions  and  profits  out  of  these  poverty- 
stricken  people.  By  organization  under  a  padrone,  for 
the  padrone's  benefit,  the  men  work  for  wages,  the 
amount  of  which  they  often  do  not  know;    but  when 


278  EFFECTIVE    INDUSTRIAL    REFORM. 

there  is  work,  they  get  it,  because  the  sort  of  slavery 
which  they  are  willing  to  suffer  and  the  standard  of 
life  which  they  are  willing  to  accept  is  most  satisfac- 
tory to  those  contractors  who  desire  to  get  labor  at  the 
cheapest  possible  rates.  The  padrone  is  a  parasite. 
He  lives  and  grows  rich  by  fleecing  ignorant  immigrants 
from  his  own  country.  He  helped  the  steamship  com- 
panies to  stimulate  immigration.  He  gets  his  commis- 
sion for  bringing  tenants  to  a  vile  tenement.  He  farms 
out  laborers  to  railroad  and  other  employers.  When 
they  are  working  he  supplies  them  with  food  at  exces- 
sive prices.  It  is  said  that  he  is  sometimes  the  owner 
of  the  Italians,  and  that  they  are  actually  his  slaves." 
"These  conditions  of  poverty  are  not  peculiar  to  the 
Italians." 


APPENDIX    III.     DISTRIBUTION  OF  WEALTH 

UNDER  OUR  PLAN.     (See  p.  254.) 

Total  wealth  of  the  country  in  1908,   $118,000.  millions. 

"     number  of  voters,  15.5      " 

Voters  under  45  years  of  age,  7.5  millions 

"      over     "       "       "     "  7.5      " 

Aggregate  wealth  to  be  distributed  to 

voters  under  45  years  of  age,  $39,333. 

Aggregate  wealth  to  be  distributed  to 

voters  over  45  years  of  age,  $78,666. 

Average  wealth  to  be  distributed  to 

each  voter  or  family  in  which  the 

father  is  45  years  of  age  or  over,  $10,000. 
Average  amount  to  be  invested  by  each  man  for 
25  years  is  $400.  If  a  young  man  would  invest  this 
sum  when  he  is  twenty-one  and  put  the  same  amount 
in  every  year  until  45  years  were  reached  he  would 
have  at  that  age  just  $10,000  invested  in  his  country's 
industries.  And  this  investment  would  be  perfectly 
safe.  It  would  be  placed  where  moth  could  not  corrupt 
nor  thieves  break  through  and  steal;  for  the  wealth  of 
the  whole  country  would  be  hihind  it.  And  if  on  the 
capital  of  the  country  we  could  earn  a  dividend  of  10%, 
then  the  first  dividend  of  the  young  investor  would  be 
just  $40.  But  when  he  had  invested  his  full  $10,000 
his  dividends  would  be  $1000  a  year. 

With  the  rapid  increase  of  the  wealth  of  the  country 
these  amounts  would  also  rapidly  increase. 


Age 

NAMES  OF  INVESTORS 

Max. 
Quota 

30 

4000 

29 

3600 

28 

3200 

27 

2800 

26 

2400 

25 

■ 

2000 

24 

1600 

23 

1200 

22 

800 

21 

A 

B 

$400 

CARD  CATALOGUE  OF  INVESTORS 


APPENDIX  IV.— METHOD  OF  RECORDING 

INVESTORS  IN  THE  ORDER  OF  THEIR 

AGES,  BY  THE   CARD-CATALOGUE 

SYSTEM. 

On  the  opposite  page  we  have  a  diagram  illustrating 
a  method  of  recording  the  names  of  the  citizens  of  a 
community  in  the  order  of  their  several  ages,  and  the 
amounts  invested,  according  to  our  plan.  The  diagram 
embraces  places  for  the  names  of  persons  from  the  age 
of  21  to  that  of  30.  Of  course,  we  shall  have  places 
for  persons  of  all  ages  who  are  allowed  to  invest. 

The  figures  at  the  left  indicate  the  age  of  the  investor. 

The  figures  on  the  right  indicate  the  maximum 
amount  of  stock  that  each  person  of  a  given  age  is 
allowed  to  buy  and  own.  Thus  the  young  man  21  years 
of  age  would  be  allowed  to  invest  $400  in  the  stock- 
capital  of  his  country's  industries;  when  he  is  22,  he 
could  invest  $400  more,  or,  $800  in  all.  When  he 
arrives  at  30  years,  he  could  invest  $4000. 

The  spaces  within  the  diagram  indicate  where  the 
cards  bearing  the  names  of  the  several  investors  are 
to  be  placed.  The  left  hand  spaces  are  for  those  who 
have  invested  less  than  their  full  quota;  the  right  hand 
spaces,  for  those  who  have  invested  their  full  amount. 
Thus  a  young  man,  21  years  of  age,  who  has  invested 
less  than  $400,  would  be  placed  in  space  A.  The  young 
man  of  21  who  has  invested  the  full  quota  of  $400 
would  be  placed  in  space  B. 

By  arranging  the  cards  alphabetically,  the  name  of 
each  citizen  could  be  quickly  found. 

As  each  man  passed  from  one  year  to  another  his 


282         EFFECTIVE  INDUSTRIAL  REFORM. 

card  would,  of  course,  be  moved  to  the  space  next  above. 

As  new  men  came  of  age,  their  names  and  the 
amounts  they  invested  would  be  recorded  on  cards  and 
placed  in  the  space  marked  21. 

When  men  die,  their  names  would  be  taken  out  of 
the  case  and  their  capital  paid  to  their  heirs. 

As  soon  as  a  man  should  invest  any  capital,  it  would 
begin  earning  dividends.  Hence,  if  dividends  were 
10%,  the  young  man  who  had  invested  his  $400,  would, 
at  the  close  of  his  21st  year,  receive  a  dividend  of  $40. 
When  30  years  of  age,  his  dividend  would  be  $400. 

Of  course,  as  the  aggregate  wealth  of  the  country 
increased,  the  maximum  quota,  which  each  should  be 
allowed  to  invest,  would  be  correspondingly  increased 

Farthermore,  each  man  will  be  allowed  and  encour- 
aged to  deposit  his  surplus  earnings  beyond  his  regular 
investments,  in  the  public  Bank,  where  it  will  draw  a 
dividend  to  the  full  earnings  of  the  Bank. 


FINAL  NOTE. 


Groups  of  Utilities  to  be  owned  by  the  people,  when  organized 
into  a  stock-corporation  after  the  plan  unfolded  in  this  book. 

I. — Electric  Street  Railways,  Lighting  Plants,  Telephones, 
Water-works.  II. — Railways.  III. — Coal  mines.  Iron  ore  and 
other  Metals,  Oil,  Forests.  IV. — Steel  Plants.  V. — Water  Power 
sites,  and  All  Power-plants.  VI. — Plants  Manufacturing  Electric 
Motors,  Dynamos  and  so  forth.  VII. — Beef  Trust  and  other  Food 
Plants.  VIII. — Manufacture  of  Farm  Machinery,  Household  Fur- 
niture and  so  forth.  IX. — Textiles,  Boots  and  Shoes,  Paper.  X. — 
All  Stores.  XL— All  Real  Estate.  XII.— Ultimately  I  would 
have  the  whole  plant  of  Civilization  owned  and  capitalized  by  the 
whole  people,  constituted  into  a  single-  vast  stock-corporation  to 
that  end. 


INDEX 


A 

American  Government 
pure  Political  Social- 
ism           170 

American  School  System 
pure  Educational  So- 
cialism           171 

Anarchistic  Character  of 
present  industrial  Sys- 
tem   3 

B 

Banks — Dividends 

earned  by  some 34 

A  Public  Bank  an  essen- 
tial    feature    of    our 

Plan  133-134 

Bemis  Edward,  —  on 
special  advantages 
demanded  by  Busi- 
ness Promoters 10,  11 

Beef  Trust,  The—    33 

Business      Corporation, 

The, — no  new  thing..  13 

Its  vast  power 14-17 

Is  Legitimate  when 
properly   controlled....  83 

Has  come  to  stay..  83 

The  People  must  be 
the  Corporation  83 

C 

Church,  The — and  In- 
dustrial Reform,Chap. 
XVI 245 

The  Church  has  not 
grasped  the  large- 
ness  of   its    mission..         245 

Aim  of  Christ  to 
transform  both  the  In- 
dividual and    Society        245 


PAGE 

Church,     The — and     Industrial 

Reform,  t(cont.)  

The  Law  to  Love 
one's  Neighbor  implies 
the      obligation       of 

social  reform 248 

The  World  looking 
to  the  Church  for  so- 
cial   reform 252 

What    the    Church 

ought  to  do 261 

Conscience  drugged    by 

present  System 6 

Concentration  of  Wealth     52-59 
Competition,  most  per- 
nicious under  present 

System  8 

Will  be  transform- 
ed under  the  new  Plan         110 
Corporation,    the    Irre- 
sponsible— Its      Rise, 

Chap.  II,  12 

Its  Might,  Chap.  Ill  18 

Its  Evil  Fruit,  Chap. 
IV _ 43 


D 

Despotic  Power,  the  in- 
evitable product  of 
present        Industrial 

System  12 

Despotism,  The  New, — 

Its  Rise,  Chap.  II 12 

Its  Might.  Chap.  Ill ..  18 

Dictates  Wages  and 
Salaries 18-26 

Dictates  who   shall 
work  and  who  not....  26 

Dictates  who  shall 
go  into  Business 27-29 

Fixes  all  Prices 29-31 


INDEX. 


PAGE 

Despotism,  The  New — (cont.) 

Determines  rise  and 
fall  of  Stocks    31ff 

Holds  all  Savings 
and  Investments  of 
the  People  at  its  mercy        3 1  ff 

Reaps  enormous 
dividends  on  actual 
capital 32 

Controls  all  Profit- 
able sources  of  Invest- 
ment   36 

Despoils  Investors 
of  Dividends  and  Cap- 
ital   38 

Power  of  Graft  40 

Monopolize  all  In- 
dustries    40 

Increasing  in  Power.  41 

Despotism,  the  New, — 
Its  Evil  Fruit,  Ch.  IV  43 

Annihilates  Justice 
in  Relation  to  Wages..     43-47 

to  Prices 49 

to  Dividends  50 

Concentrates  a  1 1 
wealth  in  few  hands     52-59 

Destroys  efficiency 
of  Production 62-67 

Destructive  of 
American  Civilization     67-76 
Despotism,  the  New, — 
Will    be     overthrown 

by  new  Plan   _         141 

Dividends — My  Plan  will 
pay  dividends  guar- 
anteeing 5%  and  as 
much  more  as  plant 

can  earn 95-99 

Dividends    on     actual 
capital  very  great  32-36 

E 

Evils  of  Present  Indus- 
trial System,  —  see 
Despotism,  the  New. 


PAGE 

F 

Farmer,  the  American, 
and  Industrial  Reform 
Chap.  XIV 203 

Is    more  wronged 
than  Labor 204-207 

Not  Possible  to  form 
Farmer's  Union 208 

Farmers  must  ad- 
vocate reform  of  this 
Book 209-212 


Q 


sa 


Great  Fortunes,  list  of  .. 
Government  Control  of 

Trusts  will  not  avail..  77 

Government   Ownership 

will  not  avail  78-81 


Immigration , — Forces 
Promoting  it — Appen- 
pendix  I. 

Indictments, — Two, 
Against  Present  Sys- 
tem    1 

Industrial  Reform, — Im 

perative  Demand  for..  76 

How  Achieved,  — 
See  Method  of  Indus- 
trial Reform 

Investments — No  safety 
in,  under  present  Sys- 
tem           50ff 

But  perfectly  safe 
under  the  new  Plan— . 


Justice — Wrongly  sup- 
posed to  be  Self-act- 
ing under  present  Sys- 
tem   — . 

Dethroned  in  pres- 
ent System  


INDEX. 


PAGE 

Justice  (cont) 

Enthroned  under 
the  new  System 145ff 

L 
Labor — cannot    do     its 
best     under     present 

System  63 

Will  do  its  best  un- 
der new  Plan 153 

Labor  Union  and  In- 
dustrial Reform,  Chap 

XIII  196 

It  has  done  good  ....         196 
But  cannot  remedy 

present  evils 197-202 

Listing  of  Investors  un- 
der new  Plan,  Appen- 
dix IV 

M 

Marxian   Scheme 171-177 

Marxian  Scheme — Com- 
munistic Capitalism, 
not  true  Socialism   ....         193 

Method  of  Effective  Re- 
form, Part  II 77 

Model  of  Plan 77-78 

Fundamental  Feat- 
ures—Chap. VI,  VII, 
VIII,  IX. 

(I)  Community  Organi- 
zed into  Business  Cor- 
poration to  own  Plant     89-91 

(II)  Capital  Subscribed 

by  people  Individually    91-95 

(III)  Pay  dividends — 
Government  guarantee 

5%  Dividend 95-99 

(IV)  Gradually  Acquire 
Ownership  of  every 
Profitable  Plant  99-104 

(V)  Wages  and  Salaries 
Fixed  by  Commission  109-1 10 

(VI)  Directors  Elected 

by  Investors  110-111 


PAGE 

Model  of  Plan  (cont) 

(VII)  Capital  Converted 
into    an    Annuity    or 

Paid  to  Heirs  in  Cashlll-112 

(VIII)  New  Generation 
to  Subscribe  as  they 
Come  of  Age     112 

(IX)  Laws  to  Protect 
Equal  Opportunity  to 
Invest 113-128 

(X)  Education  to  be 
Moral,  Vocational  and 
Economic 128-130 

(XI)  Shall  Perform  every 
Economic  Function. ...130-131 

(XII)  The  new  Plan  to 
be  Embodied  in  Con- 
stitutional Law 133-135 

Summation  of  Fun- 
damental Features 135-137 

P 

Pensions,    Industrial,  ....157-159 
Baleful    Influence    of 
Government  Industrial 

Pensions 265-267 

Corporation  Pen- 
sions   267-271 

Prices — not  fixed  by 
Justice  in  Present 
System  but  by  relative 

Power  to  Demand 7 

fixed  by  Irresponsi- 
ble     Corporation 29 

Production, — not  most 
efficient  under  present 

System  62 

Made  most  'efficient 
by  new  Plan..'. 152-154 

Public  Ownership — 

Groups  of  Utilities 
to  be  acquired  by  the 
People 282 

(1)  Electric  Street  Rail- 
ways, Lighting  Plants, 
Telephones 139 


INDEX. 


PAGE 

Public  Ownership  (cont.) 

(2)  Railroads 140 

(3)  Coal  Mines,  Iron  ore, 

Oil,  Forests n.  opp.  96 

(4)  Steel  Plants 140 

(5)  Water  Power  Sites  n.opp.  1 19 

(6)  Electric  Motors  and 
Machinery  Plants  ... .n.  fol.  127 

(7)  Beef  Trust  and  other 

Food  Plants n.  opp.  134 

(8)  Farming  Machinery, 
Household    Furniture 

and  so  forth cut  opp.  135 

(9)  Textiles,  Boots   and 
Shoes,  Paper cut  opp.  140 

(10)  Stores 2d  cut  fol.  140 

(11)  Land,  Real  Estate..         211 


Q 

Questions  and  Answers, 
Chap.  XV      213 

Are  people  Compe- 
tent for  new  Plan? 213-216 

Why  make  Subscrip- 
tion Compulsory? 216-217 

Will  People  be  will- 
ing to  Adopt? 217-218 

Will  it  be  Right?   ..218-221 

Is  new  Plan  Consti- 
tutional?    221-223 

Is   not  Compulsory 
co-operation  un-Ameri- 
can ?   223-227 

Worthless  and  indo- 
lent Classes  in  new 
Plan 227-229 

Individual  Initiative 
in  new  Plan? 229-232 

Daring  Enterprise  in 
new  Plan?  * 232-238 

Must  we  not  rely  on 
Gospel  ? 238-240 

Is  not  new  Plan  a 
radical  and  daring 
thing? 240-241 


Questions  and  Answers  (cont.J 
How  Introduce  the 

Reform  ? 241 

How  Long  to  Intro- 
duce it  ? 241-244 

R 

Race-Suicide , — Produced 

by  present  System  ....     68-70 
Reform,  Industrial,— 
See  Method  of  Indus- 
trial Reform. 
Results   from   adoption 

of  new  Plan,  Part  III         141 
Overthrow  Despotic 

Power 141-143 

Abolish  baleful  Com- 
petition and  Preda- 
ceous  Individualism....         145 

Bring  Justice  in 
Wages  and  Opportuni- 
ty to  Work 145-149 

Justice  in  Prices 9 

Bring  equal  Oppor- 
tunity to  Invest  and 

equal  dividends 150 

Bring  Efficiency   of 
production  and  great 
increase  of  Wealth  ....152-157 
Pensions      not     be 

needed  157-159 

Perfect  Individual 
and   Social  Characterl59-165 

Reform  other  realms 
adopting  same  Plan.... 165-167 
Richest  men,  Ten, — in 

America 53 

Robbery,  Organized, 
justified     bv    present 
System „ 7-10 


S 


Salaries,  high,  of  officials 

in  Corporations  19ff 


INDEX. 


PAGE 

Standard    Oil, — Divi- 
dends in  1907  32 

Price  of   Stocks   in 
1908 35 

Stocks  in  our  Plan, — no 

buying  and  selling 113 

Stock  Yards,Chicago  cut  opp  208 

Socialism, — What  it  is, 

Fundamental  principl.  168-171 

Marxian    Socialism    de- 
fined  171-177 

Defects  of 177-191 

True  Socialistic  Method  191-195 


Trusts  in  United  States 


16 


PAGE 

w 

Wages  and  Salaries, — 
Fixed  by  Irresponsible 
Corporation. 18-26 

Wages  to  the  Immigrant 
Appendix  III. 

Withdrawal    of   Capital 

in  our  Plan,  allowed  112-117 

Wealth, — greatly  in- 
creased under  the  new 

Plan       156-157 

Distribution  under 
the  new  Plan.  Appen- 
dix III 

Waste     of    Wealth    in 

present  System 59-62 


11X353 


UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 


A    000  981  736     2 


CENTRAL  UNIVERSITY  LIBRARY 
University  of  California,  San  Diego 


DATE  DUE 

JUL  2  Z  1976 

JUN23   RECD 

CI  39 

UCSD  Libr. 

